|
|
DISCOUNT WINDOW: The means by which the central bank (the Federal Reserve in the United States) makes discount loans to banks. It is through the discount window that banks can obtain the reserves that the might meet their liquidity needs and satisfy reserve requirements. The criteria to manage the discount window are dictated by the discount policy, which includes setting the discount rate and the terms of discount lending. This policy is a way to influence money supply since it can change the volume of the discount loans throughout the banking system.
Visit the GLOSS*arama
|
|
|
|
|
Lesson Contents
|
|
Unit 1: A Little Magic |
|
Unit 2: Fred Returns |
|
Unit 3: Modern Banking |
|
Unit 4: The Multiplier |
|
Unit 5: Policy | |
|
Money Creation
The magic of money creation as practiced by private banks is the topic of this lesson. While it seems like magic, money creation is a fundamental aspect of fractional-reserve banking. As such, in this lesson we take a look at why and how banks create money (a task they would seem to be the exclusive privilege of government). This examination of money creation provides insight into how government is able to control the economy's money supply. - The first unit introduces the magic of money creation, as practiced by the banking system.
- The second unit presents a hypothetical example of money creation as practiced by Fred the Goldsmith, where the money is different, but the process is comparable to modern banks.
- The third unit of this lesson, then examines a detailed example of how the banking system goes about creating money when it has an injection of excess reserves.
- In the fourth unit, the money creation process is summarized in terms of a deposit multiplier, which a thought or two on how this can be expanded to a money multiplier, which interests government as it seeks to control the money supply.
- The last unit of this lesson examines the money creation process in the context of monetary policies and government control of the money supply.
|
|
|
|
MARGINAL REVENUE PRODUCT The change in total revenue resulting from a unit change in a variable input, keeping all other inputs unchanged. Marginal revenue product, usually abbreviated MRP, is found by dividing the change in total revenue by the change in the variable input or by multiplying marginal physical product by marginal revenue. This is also termed value of the marginal product. Marginal revenue product is a key concept for understanding the demand for productive inputs.
Complete Entry | Visit the WEB*pedia |
|
|
BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time touring the new suburban shopping complex hoping to buy either a lazy Susan for you dining room table or a set of serrated steak knives, with durable plastic handles. Be on the lookout for rusty deck screws.
Your Complete Scope
This isn't me! What am I?
|
|
|
A thousand years before metal coins were developed, clay tablet "checks" were used as money by the Babylonians.
|
|
|
"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
|
|
WAPM
Weak Axiom of Profit Maximization
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
