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LABOR MARKET: A market that exchanges the services of labor resources. For the macroeconomy, this is a critical aspect of the aggregate resource markets, especially the short-run condition of rigid prices. Labor market wages tend to be rigid in short run. Such wage rigidity, was well as other short run problems, prevent labor markets from achieve equilibrium. The result is either unemployment or overemployment, both of which prevent long-run equilibrium in the aggregate market.
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Lesson 19: Money Creation | Unit 3: Modern Banking
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Page: 10 of 23
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Topic:
Fractional-Reserve Magic
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Modern banks practice fractional-reserve banking, which is the key to money creation. Note that: - Modern reserves take the form of vault cash and Federal Reserve deposits.
- Both ensure the safety of deposits.
- Banks seek profits by making loans and adding to checkable deposits.
- Checkable deposits add to the money supply.
Money creation:- Banks practice fractional-reserve banking, seek revenue through loans, and keep reserves.
- Banks keep 10% of outstanding deposits in reserves.
- Reserves over those required to are excess reserves.
- If a bank has excess reserves, then it can make loans, increase checkable deposits, and create money.
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MARGINAL PROPENSITY TO INVEST The change in business investment expenditures induced by a change in income or production (national income or gross domestic product). The marginal propensity to invest (abbreviated MPI) is another term for the slope of the investment line and is calculated as the change in investment divided by the change in income or production. The MPI plays a role in Keynesian economics. It augments the slope of the aggregate expenditures line and is part to the multiplier process. A related marginal measure is the marginal propensity to consume.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time strolling through a department store wanting to buy either a wall poster commemorating the first day of winter or blue cotton balls. Be on the lookout for strangers with large satchels of used undergarments.
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Lombard Street is London's equivalent of New York's Wall Street.
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"Be civil to all; sociable to many; familiar with few; friend to one; enemy to none. " -- Benjamin Franklin, statesman
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FGLS
Feasible Generalized Least Squares
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