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S-I MODEL: A model used to identify equilibrium in Keynesian economics based on injections (investment, I) and leakages (saving, S) for the two basic sectors (household and business). Equilibrium is achieved at the intersection of the saving line, S, and the investment line, I.

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Lesson 20: Federal Reserve System | Unit 1: The Fed Page: 2 of 20

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The Federal Reserve System helps banks through a combination of regulation and emergency reserves.

First: It is central bank, a government established and/or sanctioned bank with assorted financial tasks, that regulates the banking system and controls the money supply. It is a decentralized central system with several banks spread around the country.

Second: It was established in 1913, in response to the Bank Panic of 1907, to prevent failed banks from shrinking the money supply and causing business cycle contractions.

Third: While it's original purpose was to provide banks with reserves, it more recently uses the money supply to conduct monetary policy and stabilize the business cycle.


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AGGREGATE DEMAND DECREASE, SHORT-RUN AGGREGATE MARKET

A shock to the short-run aggregate market caused by a decrease in aggregate demand, resulting in and illustrated by a leftward shift of the aggregate demand curve. A decrease in aggregate demand in the short-run aggregate market results in a decrease in the price level and a decrease in real production. The level of real production resulting from the shock can be greater or less than full-employment real production.

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APLS

BROWN PRAGMATOX
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Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway seeking to buy either a T-shirt commemorating next Thursday or a birthday gift for your uncle. Be on the lookout for letters from the Internal Revenue Service.
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Before 1933, the U.S. dime was legal as payment only in transactions of $10 or less.
"When you play, play hard; when you work, don't play at all. "

-- Theodore Roosevelt, 26th US president

JEMS
Journal of Economics and Management Strategy
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