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RESERVE REQUIREMENTS: Rules by the Federal Reserve System governing the amount of bank reserves that banks must keep to back up their deposits. Legal reserve requirements came about because banks that practice fractional-reserve banking are sometimes inclined to make too many interest-paying loans and neglect to keep enough reserves on hand to pay their depositors. In principle, the Fed can alter reserve requirements to control the money supply. In practice, however, the Fed prefers to use open market operations or the discount rate.
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Lesson 3: Scarcity | Unit 3: Opportunity Cost
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Page: 9 of 17
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With limited resources and unlimited wants and needs, a lot of opportunities are forgone, a lot of alternatives can't be pursued. This is the idea of opportunity cost. A definition: - Opportunity cost is the highest valued alternative foregone in the pursuit of an activity.
Three points related to this definition:- Foregone Alternative: Opportunity cost means NOT doing something else, not producing another good. Using resources to satisfy one want or need means they can't be used to satisfy another.
- Highest Valued: Opportunity cost is all about giving up the best alternative possible, the most satisfying. Any activity has many alternatives. Opportunity cost is not all of these alternatives, only the most preferred, the highest valued.
- Pursuit of an Activity: Using resources to produce goods that are consumed to satisfy wants and needs. The key economic activities foregone are production and consumption.
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NONPAYER EXCLUDABILITY Whether or not nonpayers can be excluded from consuming a good. In other words, can those who do not pay for a good be excluded from consuming the good. Nonpayer excludability is based on the ability to possess and transfer property rights or ownership of a good. For some goods, nonpayers can be easily excluded from consumption because property rights are well-defined and easily controlled. For other goods nonpayers cannot be easily excluded from consumption because property rights are not well-defined and cannot be easily controlled. When combined with consumption rivalry, the result is four alternative types of goods -- private, public, common-property, and near-public.
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RED AGGRESSERINE
[What's This?]
Today, you are likely to spend a great deal of time touring the new suburban shopping complex hoping to buy either a dozen high trajectory optic orange golf balls or a large red and white striped beach towel. Be on the lookout for broken fingernail clippers.
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This isn't me! What am I?
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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"Many people think that if they were only in some other place, or had some other job, they would be happy. Well, that is doubtful. So get as much happiness out of what you are doing as you can and don't put off being happy until some future date. " -- Dale Carnegie
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AIC
Akaike's Information Criterion
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