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REAL-BALANCE EFFECT: A change in aggregate expenditures on real production made by the household, business, government, and foreign sectors that results because a change in the price level alters the purchasing power of money. This is one of three effects underlying the negative slope of the aggregate demand curve associated with a movement along the aggregate demand curve and a change in aggregate expenditures. The other two are interest-rate effect and net-export effect.
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Lesson 18: Banking | Unit 3: Reserve Banking
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Page: 14 of 24
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Topic:
Goldsmith Deposits
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The story continues when Bill the Knight needs to store some gold for a short time. The story: - Bill has some gold he would like to store in Fred's safe.
- Fred agrees and charges Bill for this storage service.
- When Bill returns from his journey he retrieves his gold, less a modest service charge.
- Bill informs other knights about this service and they also begin taking advantage of Fred's storage service.
- Fred realizes that storing gold is an easy way to earn a living.
Fred has stumbled upon the depository function of modern banks.
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PERFECT COMPETITION, LONG-RUN PRODUCTION ANALYSIS In the long run, a perfectly competitive firm adjusts plant size, or the quantity of capital, to maximize long-run profit. In addition, the entry and exit of firms into and out of a perfectly competitive market guarantees that each perfectly competitive firm earns nothing more or less than a normal profit. As a perfectly competitive industry reacts to changes in demand, it traces out positive, negative, or horizontal long-run supply curve due to increasing, decreasing, or constant cost.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet looking to buy either a T-shirt commemorating next Thursday or a birthday gift for your uncle. Be on the lookout for gnomes hiding in cypress trees.
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This isn't me! What am I?
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A scripophilist is one who collects rare stock and bond certificates, usually from extinct companies.
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"Far and away the best prize that life has to offer is the chance to work hard at work worth doing." -- Theodore Roosevelt, 26th US president
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NFA
National Futures Association
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