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DEMAND SHOCK: A disruption of market equilibrium (that is, a market adjustment) caused by a change in a demand determinant and a shift of the demand curve. A demand shock can take one of two forms--an Demand Increase or a Demand Decrease. An increase in demand is seen as a rightward shift of the demand curve and results in an increase in equilibrium quantity and an increase in equilibrium price. A decrease in demand is a leftward shift of the demand curve and results in a decrease in equilibrium quantity and a decrease in equilibrium price.

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Lesson 20: Federal Reserve System | Unit 4: Monetary Policy Page: 12 of 20

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The Federal Reserve controls banks as a means of controlling the money supply.

A more specific definition:

Monetary policy is controlling the money creation activity of the fractional-reserve banking system to control deposits and the money supply to affect business-cycle fluctuations.

Early tasks of the Fed:

  • To keep banks in business and to avoid serious reductions in bank reserves that would shrink financial wealth and money supply.

    What the Fed does now:

  • Manipulate the money supply by manipulating reserves.

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PRODUCT INNOVATION

An innovation of a new product, technology, or idea that generates a beneficial improvement in society and the economy; one that is fundamentally different from existing products, technologies, or ideas. The contrast is with a process innovation, which is an improvement in an existing product, technology, or idea.

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APLS

BEIGE MUNDORTLE
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Today, you are likely to spend a great deal of time flipping through mail order catalogs looking to buy either a set of serrated steak knives, with durable plastic handles or a pair of blue silicon oven mitts. Be on the lookout for pencil sharpeners with an attitude.
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Approximately three-fourths of the U.S. paper currency in circular contains traces of cocaine.
"No amount of business school training or work experience can teach what is ultimately a matter of personal character. "

-- Truett Cathy, Chick-fil-A Inc. founder

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