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AGGREGATE MARKET SHOCKS: Disruptions of the equilibrium in the aggregate market (or AS-AD model) caused by shifts of the aggregate demand, short-run aggregate supply, or long-run aggregate supply curves. Shocks of the aggregate market are associated with, and thus used to analyze, assorted macroeconomic phenomena such as business cycles, unemployment, inflation, stabilization policies, and economic growth. The specific analysis of aggregate market shocks identifies changes in the price level (GDP price deflator) and real production (real GDP). However, changes in the price level and real production have direct implications for the unemployment rate, the inflation rate, national income, and a host of other macroeconomic measures.
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Lesson 20: Federal Reserve System | Unit 4: Monetary Policy
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Page: 15 of 20
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The discount rate is the interest rate the Fed charges for reserve loans to commercial banks.- The Federal Funds rate is for loans between commercial banks.
- The discount rate is for loans from the Fed to commercial banks.
- Banks borrow from the Fed when the need reserves to stay in business. The price they pay is the discount rate.
Why don't troubled banks use the Federal Funds Market? - Other banks are probably reluctant to extend a loan.
- The entire banking system might be short of reserves.
- The discount rate is typically lower than the federal funds rate.
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AVERAGE REVENUE PRODUCT CURVE A curve that graphically illustrates the relation between average revenue product and the quantity of the variable input, holding all other inputs fixed. This curve indicates the per unit revenue at each level of the variable input. The average revenue product curve is one of two related curves often used in the analysis of factor demand. The other, and more important, is marginal revenue product curve.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales looking to buy either a 200-foot blue garden hose or a video camera with stop action features. Be on the lookout for high interest rates.
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Sixty percent of big-firm executives said the cover letter is as important or more important than the resume itself when you're looking for a new job
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"All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence. " -- Martin Luther King Jr., civil rights leader
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AEA
American Economic Association
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