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EXCESS RESERVES: The amount of bank reserves over and above those that the Federal Reserve System requires a bank to keep. Excess reserves are what banks use to make loans. If a bank has more excess reserves, then it can make more loans. This is a key part of the Fed's ability to control the money supply. Using open market operations, the Fed can add to, or subtract from, the excess reserves held by banks. If the Fed, for example, adds to excess reserves, then banks can make more loans. Banks make these loans by adding to their customers' checking account balances. This is of some importance, because checking account balances are an major part of the economy's money supply. In essence, controlling these excess reserves is the Fed's number one method of "printing" money without actually printing money.
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ECONOMIC SCIENCE: The application of the scientific method to economic phenomena. In other words, economists develop theories, test hypotheses, and seek to explain things like prices, unemployment rates, monopolize markets, business cycles, market shortages, and virtually everything else that might be considered economic "stuff." However, economic science is also directed toward phenomenon that might NOT be considered economics, including voting, crime, and leisure. The key element, however, is that all of these, and many more, phenomena related to the fundamental problem of scarcity in one way or the other. See also | scientific method | social science | science | scarcity | price | unemployment rate | monopoly |
Recommended Citation:ECONOMIC SCIENCE, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: October 12, 2024].
AmosWEB Encyclonomic WEB*pedia:Additional information on this term can be found at: WEB*pedia: economic science
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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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GRAY SKITTERY
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Today, you are likely to spend a great deal of time searching for a specialty store wanting to buy either throw pillows for your bed or a package of blank rewritable CDs. Be on the lookout for pencil sharpeners with an attitude.
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Approximately three-fourths of the U.S. paper currency in circular contains traces of cocaine.
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"Nothing ever built arose to touch the skies unless some man dreamed that it should, some man believed that it could, and some man willed that it must. " -- Charles Kettering, inventor
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JEP
Journal of Economic Perspectives
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