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