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LEGAL CLAIMS: Ownership of the physical goods, services, and resources that make up the real side of the economy. Legal claims are a key feature of the paper, or financial side of the economy. Transferring legal claims is the primary method of diverting income from household saving to investment and government borrowing. Legal-claim buyers loan income and legal-claim sellers borrower income.
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Lesson 17: Money | Unit 2: More About Money
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Page: 8 of 25
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Topic:
Standard of Deferred Payment
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Money is used as a standard of deferred payment, buying now and paying later.- A car loan: Borrow money to buy a car today, then pay off the loan with deferred payments into the future.
- Money as a standard of deferred payment is a direct consequence of the unit of account and store of value functions of money.
- Money is the standard for current prices and future payments based on those prices.
- For money to function as a deferred payment, it must retain value.
- The key to storing value in money is price inflation.
- Deferred payments need to anticipate future money values based on future inflation.
- The inflation adjustment is accomplished by through interest rates.
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VARIABLES Quantities, usually represented as symbols, that can take on one of a set of values. A variable is "variable" because its value can "vary." A primary goal of economic analysis is to determine the specific value that a variable takes on under specific circumstances.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time at a flea market wanting to buy either a weathervane with a cow on top or a box of multi-colored, plastic paper clips. Be on the lookout for telephone calls from long-lost relatives.
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Okun's Law posits that the unemployment rate increases by 1% for every 2% gap between real GDP and full-employment real GDP.
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"A winner is someone who recognizes his God-given talents, works his tail off to develop them into skills, and uses those skills to accomplish his goals. " -- Larry Bird, basketball player
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AACP
American Assocation of Commercial Publications
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