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GAME THEORY: An analysis that illustrates how choices between two plays affect the outcome of a "game." Game theory is commonly used in economics to illustrate interdependent decision-making among oligopoly firms. It illustrates that one firm makes a decision based on the decision expected from the other firm. One key conclusion from the game theory analysis is that firms often make decisions that are "second best" or the "lesser of two evils." The classic example of such a decision is the prisoners' dilemma, in which two prisoners both confess to a crime to avoid harsher punishment when not confessing would avoid any punishment.
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Lesson 20: Federal Reserve System | Unit 1: The Fed
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Page: 1 of 20
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A key player in the medieval money game: Clarence the King. Clarence is the government regulator. Because Fred practices fractional-reserve banking like modern banks, he has a problem: - Several knights redeem their gold receipts at the same time, but Fred does not have sufficient reserves.
- King Clarence provides Fred with enough gold to satisfy the knights.
- If Fred's banking operation ceases to exist, economic prosperity is also in jeopardy.
- King Clarence decides to watch Fred to make sure that he keeps enough gold in reserve to avoid similar problems.
This is how King Clarence sort of 'discovers' the regulatory function of the modern banking system.
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GOVERNMENT CONSUMPTION EXPENDITURES AND GROSS INVESTMENT The official item in the National Income and Product Accounts maintained by the Bureau of Economics Analysis measuring government purchases undertaken by the government sector. Government consumption expenditures and gross investment averages between 15-20 percent of gross domestic product. As might be expected, this percentage tends to be ebb and flow with the political winds. Some political leaders prefer more government activity, others less. However, this percentage is even more dependent on military conflicts and wars that require massive government activity. The other official expenditures included in the National Income and Product Accounts are personal consumption expenditures, gross private domestic investment, and net exports of goods and services.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time watching infomercials seeking to buy either an electric coffee pot with automatic shutoff or a brown leather attache case. Be on the lookout for crowded shopping malls.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"The time to repair the roof is when the sun is shining." -- John F. Kennedy, 35th U. S. president
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D-J
Dow Jones
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