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AGGREGATE MARKET EQUILIBRIUM: The state of equilibrium that exists in the aggregate market when real aggregate expenditures are equal to real production with no imbalances to induce changes in the price level or real production. In other words, the opposing forces of aggregate demand (the buyers) and aggregate supply (the sellers) exactly offset each other. The four macroeconomic sector (household, business, government, and foreign) buyers purchase all of the real production that they seek at the existing price level and business-sector producers sell all of the real production that they have at the existing price level. The aggregate market equilibrium actually comes in two forms: (1) long-run equilibrium, in which all three aggregated markets (product, financial, and resource) are in equilibrium and (2) short-run equilibrium, in which the product and financial markets are in equilibrium, but the resource markets are not.
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Lesson 19: Money Creation | Unit 2: Fred Returns
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Page: 7 of 23
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Elizabeth needs a loan, but she doesn't want gold, she wants receipts, she wants money.Remember that: - Fred issues receipts only for deposits.
- Can he just issue receipts?Two options:
- One: Fred can loan gold from his safe, which Elizabeth can deposit for receipts.
- Two: Fred can loan Elizabeth the receipts directly. Note that:
- With both, Elizabeth ends up with receipts and Fred ends up with the same amount of gold in his safe.
- With both, receipts are not all backed by gold: The loan increases the number of receipts in circulation.Fractional-reserve banking:
- If every receipt is redeemed, then Fred is in trouble.
- But Fred knows that only a fraction of the gold is redeemed at any given time.
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SUPPLY SCHEDULE A table that illustrates the alternative quantities of a commodity supplied at different prices. A supply schedule is a simple means of summarizing information about supply price and quantity supplied for a particular good. It is used to highlight the law of supply. It can also be used to derive a supply curve.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet hoping to buy either a really, really exciting, action-filled video game or a coffee cup commemorating the moon landing. Be on the lookout for pencil sharpeners with an attitude.
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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.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects. " -- Alexis de Tocqueville, statesman, author
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AMW
Average Monthly Wage
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