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49 Cards in this Set

  • Front
  • Back
Calculate M1
Currency and coins not in bank vaults + checkable deposits + Travelers checks
Calculate M2
savings deposits + small time deposits + M1
what do assets contain on the T-table?
-cash
-loans
-buildings
-securities
what do liabilities and net worth cover on the T-table?
-networth (Stock shares)
-checkable deposits
Should the total assets on the T-table be equal to the liabilities and net worth total (right side)cost?
yes
given a reserve ratio of X%, how do you find the required reserves?
take X% of total checkable deposit
\/
(X% in decimal)*Checkable deposit
excess reserves=?
cash - required reserves
monetary multiplier=?
1
------------------------------
(reserve ratio in decimals)
how do you find the maximum amount money supply can be changed?
use the maximum expansion equation
how to find maximum expansion
equation?
M.E.=initial excess reserve* monetary multiplier
"National" bank i.e.US treasury represented by...?
OCC (Comptroller of the currency)
what agency gives a Credit union power to do banking?
NCUA (National Credit Union Administration)
what agency gives a chartered thrift power to do banking??
OTS (office of thrift supervision)
For thrift/bank the _______ insures its depositors up to $_______
FDIC (federal deposit insurance corp)
$250,000
For Credit unions, the ______ insures it's depositors with the amount of $______
NCUSIF (National Credit union share insurance fund)
$250,000
Real DI (disposable income)=
Real C (spending) + Real S(saving)
APC=
Real C(spending)
--------------------
Real GDP(=DI)
APS=
Real S(Savings)
------------------
Real GDP
MPC=
Change in Real C (spending)
---------------------------------
Change in Real GDP
MPS=
change in real S
--------------------
change in real GDP
difference between APC/APS & MPC/MPS?
MPC/MPS are constant
APC _______ as RGDP increases
APS _______ as RGDP increases
decreases
increases
Keynesian spending multiplier=
= 1/MPS = 1/(1-MPC)
Change in equilibrium level of income and output=
Keynesian Spending Multiplier * Autonomous change in aggregate expenditure ****(not in AE column but given)****
to find a new value of equilibrium for RGDP...
Use the change in equilibrium found and +/- the difference from the equilibrium)
-Recessionary gaph?
-on graph?
-the level of RGDP is below full-employment equilibrium
-EQ is less than FE
-inflationary gap?
-on graph?
-the level of RGDP is above full employment equilibrium.
-EQ. is more than FE
Price Index value in year Y=
price of stuff in yr Y
--------------------------- (*100)
price of stuff in BASE yr
change in prices (for price index)=
index final - index initial
---------------------------- (*100)
index initial
Real GDP (for price index)=
nominal gdp
--------------- (*100)
price index
growth rate of RGDP=
recent RGDP - initial RGDP
----------------------------- (*100)
initial RGDP
what is used to find how many yrs it would take for a RGDP to double?
Rule of 70
what is the rule of 70?
#of years to double= 70/Rate
Aggregate Expenditure=
C + I + G + (X-M)
to compute total tax due (liability) do:
ranges* marginal tax rate in decimals for that amount. then add them
A.verage T.ax R.ate=
tax liability
------------- (*100)
taxable income
Progressive tax structure=
ATR Increases as Taxable Income Increases
Regressive Tax Structure=
ATR Decreases as Taxable income Increases
Proportional Tax Structure=
ATR is the same for all taxable incomes
shortage exists when
quantity demanded is more than quantity supplied
surplus exists when
quantity supplied is more than quantity demanded
Price floor
government sets a minimum price
(may lead to permanent surplus)
price ceilings
government sets a maximum.
ceteris paribus, what causes the Quantity demanded to decrease?
INVERSE, so increase in price
ceteris paribus, what causes quantity supplied to decrease?
DIRECT, Decrease in price
inferior good
demand and income are indirectly related
normal good
demand and income are directly related
Determinants of DEMAND
1.Prices of related goods
2.Income
3.Number of buyers
4.Expecations of buyers
5.Taste
Determinants of SUPPLY
1.Number of sellers
2.Input/resources prices
3.Price of substitutes
4.Sellers Expectations
5.Technology