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LAND: One of four basic categories of resources, or factors of production (the other three are labor, capital, and entrepreneurship). This category includes the natural resources used to produce goods and services, including the land itself; the minerals and nutrients in the ground; the water, wildlife, and vegetation on the surface; and the air above.

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Lesson 18: Banking | Unit 5: The Economy Page: 24 of 24

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  • Some of the main benefits provided by banks as:
    • Financial intermediaries: banks match savers and borrowers.
    • Depository institutions: banks oversee a share of the nation's M1 money supply.
  • That when a bank fails to maintain adequate reserves, it runs the risk of starting a chain reaction that could cause economy-wide financial instability.
  • That banking regulations have lessened but not eliminated banking instability problems.

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REQUIRED RESERVES

The reserves (vault cash and Federal Reserve deposits) that banks are required by government to keep to back up deposits. The primary use of required reserves is to process daily checkable deposit transactions. The government regulator in charge of setting reserve requires is the Federal Reserve System. Required reserves are usually in the range of 3 to 10 percent for checkable deposits and substantially less (0 percent) for savings deposits. Any legal reserves held by banks over those required to back deposits, termed excess reserves or free reserves, are available for interest-generating loans.

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Today, you are likely to spend a great deal of time watching infomercials trying to buy either throw pillows for your bed or a package of blank rewritable CDs. Be on the lookout for mail order catalogs with hidden messages.
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Potato chips were invented in 1853 by a irritated chef repeatedly seeking to appease the hard to please Cornelius Vanderbilt who demanded french fried potatoes that were thinner and crisper than normal.
"Experience keeps a dear school, but fools will learn in no other. "

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