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INDIFFERENCE MAP: A graph of two or more indifference curves. Higher indifference curves are associated with higher levels of utility.
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Lesson 19: Money Creation | Unit 4: The Multiplier
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Page: 17 of 23
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The key to the deposit multiplier is required reserves. It is no coincidence that when the reserve ratio is 10%: - $10 of deposits require $1 of reserves and that $1 of reserves can back up $10 of deposits.
- It's all part of the same process.
The deposit multiplier is the inverse of the reserve ratio.The key to the deposit creation process: - Each bank keeps a fraction of the reserves received when checks are deposited and cleared.
- The bank sends along the rest to another bank by making a loan.
Therefore:- The less banks keep, the more they send to other banks and the more is used to perpetuate the process.
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AVERAGE PROPENSITY TO CONSUME The proportion of household income that is used for consumption expenditures. The average propensity to consume (abbreviated APC) is really nothing more than average consumption. Together with the average propensity to save, it indicates how a given level of income is divided between consumption and saving. A related consumption measure is the marginal propensity to consume.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales seeking to buy either an instructional DVD on learning to the play the oboe or a small, foam rubber football. Be on the lookout for celebrities who speak directly to you through your television.
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This isn't me! What am I?
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Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
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"The road to success is always under construction. " -- Lily Tomlin, Actress
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MGE
Minneapolis Grain Exchange
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