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19 Cards in this Set

  • Front
  • Back
Name three impacts of market imperfection in financial markets according to the New Consensus view.
1. Strong/Semi-strong market efficiency is not possible
2. Banks emerge to complement financial markets
3. Short term bubbles can appear
What is the role of banks according to the New Consensus?
They are intermediaries between savers and investors
What is the direct impact of financial markets according to Post Keynesians?
Make illiquid assets liquid
Why can't aggregate saving precede aggregate investment in Post Keynesianism?
I -> Y -> S
What is the purpose of banks in Post Keynesian analysis?
They allow financing of economic activity and they are experts at judging credit worthiness
According to New Consensus, what is the best way to promote investment?
Promote savings
According to Post Keynesian views, what is the best way to promote investment?
Promote spending
According to the exchange view, what is a must-have quality for the medium of exchange?
Easy to carry
According to the exchange view, what function must monetary intruments perform to be detected?
Medium of exchange
According to the exchange view, what are the origins of money?
Money emerged from commercial transactions
According to the exchange view, what was the last form of money to emerge?
Immaterial
According to the alternative approach, what is the most common form of money?
Immaterial
According to the alternative approach, why is inappropriate to talk about the dematerialization of money?
Monetary instruments were first immaterial
According to the alternative approach, where does money come from?
Money emerged from the need to make sacral payments
What is a characteristic of a monetary instrument under the alternative approach?
Circulates at PAR
According to the multiplier theory, what is the main barrier to monetary creation?
The amount of reserve
Under the liquidity/solvency vuew, which of the following is the main barrier to monetary creation?
The cost of getting reserves
Under solvency/liquidity, how does a bank create the need for reserves?
Loans/advances create deposits and deposits create the need for reserves
According to solvency/liquidity, do central banks have control of reserves?
No