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what is the definition of money? (M1, M2, M3)
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What factors influence the demand of money?
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ECON FINAL
| Question | Answer |
|---|---|
| what is the definition of money? (M1, M2, M3) | money is a medium of exchange, a standard of value, and store of value. M1= currency, travelers checks, checkable deposit, M2= M1+ savings deposit + small- denomination notes, M3= M2+ travelers checks +big denomination notes |
| What factors influence the demand of money? | inflation, income, interstate, credit availability |
| How many types of branch banking? | 3: branch vs unit, state vs. national, and FDIC- Federal deposit insurance company |
| tools of monetary policy? | Interest rates goes down, reserve ratio required goes down, Buting t bonds goes up |
| What is the fed funds rate? | the interest rate that one bank charges to other banks overnight to fulfill their reserve ratio requirements from the Fed. |
| how many federal reserve districts are there? | 12 |
| what is the purpose of the banks business? | |
| what is the reserve ratio requirement? | E.M. = 1/R.R.R |
| what is the loan shark interest? | any interest rates that are over 20% |
| %= | interest/principle |
| what is the equation of exchange? | M.V. =P.Q. |
| crude version of the quantity theory? | MxV- PxQ-------M<-->Q |
| Sophisticated version of the quantity theory | 1, Full emp--> M^--> P^ 2. Below Emp. M^--> Q^ |
| New classical theory | Rational expectation theory: 1. individual and the firm learn the experiences through mother and father, 2. People aact based on self interest, 3. Markets are competitive |
| Supply-side theory | regeanomics- 1. cut tax, 2. reduce get. spending and regulations |
| Behavioralism theory | NOT RATIONAL |
| What is human capital? | the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country. |
| example of growth comparable institution | 1. capital accumulation, 2. available resources, 3. growth-comparable institutions, 4. technological development, 5. entrepreneurship |
| definition of productivity+ determinants of labor force changing | labor forces change due to: 1.average work week/year, 2. declining education system, 3. Permanent lower class, 4. Restriction of immigration, 5. Population change |
| what is the lorenz curve? (1 problem, several questions) | |
| official poverty | 1. 4 people per family, 2. 1/3 of money is used for food |
| solutions for poverty | liberal solutions and conservative solutions |
| reasons against international trade | 1. national security, 2. infant industry, 3. low wage argument, 4. the employment argument |
| tools of trade policy | 1. tariff, 2. quate- the # of units that you buy , 3. Embargo |
| reasons for US trade imbalance | 1. consumption junkies, 2. huge imports (oil), 3. failing eduction system, 4, role of multi national company, 5. relative growth rate, 6. Shrinking manufacturing base |
| solutions of trade deficit | 1. maintain high rate of productivity, 2. lower our dependency on foreign imports, 3. reduce our rising deficit w/ China, 4. face up with the national consumption junkies |
| exchange rate | |
| BOP problem | always imbalance, surplus or deficit |
Created by:
laraa391
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