What is : benefit of adding an extra unit decreases with each unit added
100
1= MPC.....?
What is MPC+MPS=1
100
autonomous consumption
What is the amount you have to spend regardless of income. Also, the vertical intercept on the consumption function
100
formula for the inflation rate
What is
.
P=change in P/P
200
Y-TX and what you can do with it
What is Yd=C+S
200
inferior good
What is a good for which Demand decreases as income rises
200
relationship of real and nominal. Ex. Wr=?
What is Wr=Wn/Plevel
200
what the labor market shows-where is FE?
What is how many people want to work at any given wage rate (LSC) and how many people firms want to hire at any given wage rate (LDC); intersection of LSC and LDC = FE
200
How to find AE
What is
C+Ip+G+NX
300
MPC
What is: Change in C/change in Yd
300
Say's Law and OMEQ
What is
Say's Law=supply creates its own demand; overproduction is impossible
OMEQ= when everything supplied is consumed, overproduction is nonexistent
300
Deposit Expansion Multiplier (Money Multiplier)
What is 1/RRR
300
liquidity
What is how similar an asset is to money/how easily an asset can be converted to money
300
OMP=?Pbonds=decrease ?=? Md
What is
OMP=increase Pbonds=decrease irate=increase Md
400
C=a+b(Yd)
What is Consumption Function formula?
400
M1 and M2
What is
M1= paper and coins outside banks+ electronic money inside banks +travelers checks
M2= M1+savings accounts + money market funds + CD's <$100,000
400
Excess Reserves (ER) (bank system)
What is (1-RRR)(RR)=ER
400
3 Tools of Monetary Policy of the FED
What is
1. OMO (OMP, OMS)
2. change in the discount rate
3. change in the RRR
400
How to find unplanned inventory changes
What is
Y-AE=UIchanges
positive number=UIA
negative number = UIR
500
Real GDP
What is Yr=Yn/Pgdp
500
vault cash+deposits at the FED, NOT part of M1
What are Bank Reserves
500
Autonomous Spending Multiplier, 2 ways
What is
change in Y/change in AE
OR
1/(1-MPC) [aka. 1/MPS]
500
3 types of net investment (In)
What is
1. office buildings, factory equipment, software
2. new home construction
3. changes in inventories
500
Md and the line of Ms
What is
Md=how much money people want to hold at each interest rate
Ms line=vertical (perpendicular to the horizontal-Md-axis) in the SR