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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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REAL GDP: The total market value, measured in constant prices, of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. The key is that real gross domestic product is measured in constant prices, the prices for a specific base year. Real gross domestic product, also termed constant gross domestic product, adjusts gross domestic product for inflation. You might want to compare real gross domestic product with the related term nominal GDP. See also | real | gross domestic product | price level | inflation | real production | nominal gross domestic product | GDP price deflator | purchasing power | real interest rate | real wage |
Recommended Citation:REAL GDP, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2023. [Accessed: March 25, 2023].
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WHAT? The allocation question that determines the types and quantities of goods and services produced with society's limited resources. What goods and services are produced with society's limited resources? This is one of three basic questions of allocation. The other two are How? and For Whom?
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"Success is the ability to go from one failure to another with no loss of enthusiasm." -- Sir Winston Churchill
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AIO
Action Information Organization
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