Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
31 Cards in this Set
- Front
- Back
|
MODERN ARG. DEMAND/SUPPLY
CHARACTERISTICS |
FLOW VARIS
DESIRED CONSTRAINTS REAL BALANCE AFFECT INFLATON DOWN + MONEY SUPPY CONSTANT = PURCHASING POWER |
|
|
M1
M2 MZM MONETARY BASE |
M1 = COINS/CURRENCY IN CIRC.
TRAVELERS CHECKS & DEM. DEP M2 = RETAIL $ MARK. FUNDS SAVING ACCTS. SMALL CDS MZM = $ W/ ZERO MATURITY BASE = SAVED/CIRC & DEP @ FED |
|
|
1930 TO REV. WAR
|
COMMODITY $ = UNSTABLE
CONTINENTALS = WORTHLESS ALEX HAM = SOUND $ 1ST BANK ENGLAND DID NOT ALLOW COLONIES TO MAKE OWN $ |
|
|
1971 - 1811
|
1ST BANK = GOOD W/ SOUND $ AND REGULATING $
COINAGE ACT = BIMENTALIC GRESHAMS LAW BAD$ DRIVES OUT THE GOOD$ SILVER = BAD $ DROVE GOLD OUT OF CIRC. |
|
|
1811- 1836
|
PANIC OF 1834 - 2ND BANK
NICK BIDDLESOUND MONEY/TIGHT $ POLICY CHANGED THE RATE OF GOLD/SILVER GOLD = BAD $ FOREIGN $ NOT ALLOWED CIVIL WAR |
|
|
1836 - 1896
|
12000 $
CREATING NATIONAL BANKS STATE BANKS 10% TO GOVT = MANY BANKS FAILED GOLD STANDARD = NOT MINTED SILVER COINS DEFLATION |
|
|
GOLD STANDARD
|
GOLD CIRCULATION-FULL BODY
PAPER $ FULLY/FRACT BACKED FIXED EXCHANGE RATE ANYONE CAN REDEEM DO AS WISH CANT PERSONALLY MINT |
|
|
1900 - 1913
|
GOLD FLOATS IN = 25% WORLD
EXPLOSION OF BANKS PANIC OF 1907 = JP MORGAN = LENDER OF LAST RESORT BANK RUNS LASTED 1900-1907 FED CREATED IN 1913 |
|
|
FEDERAL RESERVE SYSTEM
|
BANKRES BANK
12 FEDERAL RESERVES 7 PEOPLE OF B OF D (APPT.) TOTAL OF 12 VOTERS NATIONAL BANKS = MEMBERS ELASTIC CURRENCY |
|
|
1913 - 1968
|
WWI
US ONLY COUNTRY ON GOLD STAND 1926-1929= FED EASY $ 1929-1933 = FED TIGHT $ AND FED SHRUNK M2 = BAD 1933 - GLASS-STEAGALL ACT = FIREWALLS TO PROTECT SMALL BANKS FAMOUS ACCORD = FED INDEPEND. VIETNAM WAR = $ SUPPLY INCREASE AND REFUSED GOLD BACKING |
|
|
1969 - 1994
|
NIXON OFF GOLD STANDARD
REFORM ACT = BROKE DOWN SOME GLASS-STEAGALL FIREWALLS COMMUNITY REINVEST. ACT = LOCAL BOUNDRIES RIEGLE-NEIL ACT = ALLOWED INTER. STATE BANKING REFORM RECOVERY = BILL SEIDMAN GOOD JOB |
|
|
TOOLS OF THE FEDERAL BANK
|
1 - RESERVE REQUIREMENTS
2 - FED FUND RATE 3 - OPEN MARKET OPERATIONS EASY $ = BUY TIGHT $ = SELLS FED FUND RATE = 5.25% DISCOUNT RATE > FED FUND RATE |
|
|
GDP ACCOUNTS
|
FLOW VARIABLE
FINAL PRODUCTION CONSUMER SOVEREIGNTY NO ILLEGAL ACTIVITIES |
|
|
GDP MEASURE OF WELFARE
|
DOES NOT INCLUDE: POLLUTION COSTS, HOUSEVIVES SERVICES
DOES INCLUDE: DEPRECIATION OF CAPITAL EQUIPMENT DOESNT NOT PICK UP ON PRODUCT QUALITY DOES NOT WELL WITH DESIRE FOR LEISURE VS WORK |
|
|
MARSHA, PIGOU, FISHER
|
SAYS LAW = CAP. IS HERENTLY STABLE @ FULL EMPLOY
SAYS LAW = TRUE IF FLEX. VELOCITY $ = HIGHLY STABLE GOVT = FULL GOLD STAND. BALANCED BUDGETS YEARLY FISH = NOM.INET.R = REAL INT.R + IEXPECT. |
|
|
KEYNES
|
FUND. PROB. = CAP ECON SURPLUS OF LABOR
WAGES/PRICES NOT FLEX IN A DOWNTURN DEFICIT SPENDING IN DEPRESS. VELOCITY OF MONEY UNSTABLE INCOME ADJUSTS NOT PRICES |
|
|
EISENHOWER
|
LOW!
LOW GDP GROWTH INFLATION LOW UNEMPLOY LOW |
|
|
KENNEDY-JOHNSON
|
HIGH!
LONGEST ECON EXPANSION @ TIME M2 HIGH WANTED GUNS/BUTTER = INFLATION |
|
|
US DEMOGRAPHICS
|
BABY BOOMERS (1946-64)
75.9 LOVE SPENDING GENERATION Y (1983-00) 74.2 SELF CENTERED LIFE EXPECT. GREW WOMEN LONGER LIFE DIVROCE RATES INCREASE HOUSE SIZE DECREASE |
|
|
FREIDMAN & MONETARISTS
|
VELOCITY OF $-HAS SOME ORDER
NO SAYS LAW - (EX:GD) AMENDMENT: M2 GROWTH OF 5% YEAR, YR BALANCED BUDGET FLOAT EXCHANGE RATES |
|
|
REAGAN ADMINISTRATION
|
LISTEN TO SUPPLY SIDE
LOWERED INC. TAXES SOUND $ 1982 = BAD ECON 1982-1988 = UNEMPLOY DECREASE 1884 = HIGH ECON GROWTH GREENSPAN INCREASED M2 STOCK MARKET CRASH IN 1987 - FED LAST RESORT |
|
|
BUSH SENIOR ADMINISTRATION
|
PROMISED NOT TO RAISE TAXES - ENDED RAISING TAXES
1991 = ECON RECESSION BUSH BLAMED THE POOR GDP GROWTH ON GREENSPAN |
|
|
CLINTON ADMINISTRATION
|
LONGEST ECON EXPAN IN US HISTORY
REFORM HEALTH CARE UNEMPLOY RATE DOWN EACH YR FED GREW $ SUPPLY = STOCK BOOM |
|
|
EQUATION OF EXCHANGE
|
MV = PQ
|
|
|
FRIEDMAN VIEWS M =
|
MONEY SUPPLY - M2
CONSTITUTIONAL AMENDMENT TO GROW 5% ANNUALLY |
|
|
FRIEDMAN VIEWS V =
|
VELOCITY OF MONEY
PREDICTABLE BUT NOT STABLE (MIDDLE GROUND) |
|
|
FRIEDMAN VIEWS P =
|
PRICE INDEX - 1%
1% BC Q HAS POTENTIAL OF 4 % |
|
|
FRIEDMAN VIEWS Q =
|
REAL GDP - 4%
HAS THE POTENTIAL OF 4% BC OF NO SAY'S LAW |
|
|
FRIEDMAN VIEWS
|
FLAT INCOME TAX (ALL BRACKETS) @ 19%
FEDERAL BUDGET BALANCED YEARLY |
|
|
ESSAY - CLINTON
|
REAL GDP - 3.7
UNEMPLOY - 5.2 INFLATION - 2.6 ALL DEMOS BETTER THEN PAST 100 YRS. AVG GROWTH = HIGH UNEMPLOY/INFLAT = LOW LARGEST EXPAN. IN US HISTORY - MANY SAY HE CAME @ A PROSPEROUS TIME |
|
|
ESSAY - BUSH JUNIOR
|
GROWTH - AVG. 2.6%
UNEMPLOY - AVG. 5% NOW 4.4% INFLATION - 2.6% SOME BELIEVE HE HAS HAD IT HARDER THAN CLINTON DUE TO HARDER ECON PROBS. HAD MORE PROBLEMS TO FIX |
