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31 Cards in this Set

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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