money
what are the 4 functions of money?
Medium Measure Standard Store
What is the goal of the fed
Keep stable money
money vs wealth
money is anything used to purchase goods and services… wealth is an accumulation of savings through purchasing of assets
what is the multiplier effect
The greater then a proportional increase in national income resulting from an increasing demand
what is the law of aggregate demand
Demand for all goods & services in all markets
interest rate is
The price of money
how many district banks are there
12
financial assets
written claims have rights to future income from sellers
expidenture means
Spending
what is the wealth effect
increase in the aggregate price level reduces the purchasing power of many assets
what is a bond
Bonds are issued by governments and corporations when they want to raise money.
where is our closest fed bank located
Atlanta
liquidity
how easy an asset can be turned into cash
What is MPC
Change in consumption/ Change in disposable income
ag price goes up and purchasing power …
purchasing power goes down
what is the money market
The money market is where the Fed and the users of money interact
what does the fed mainly effect
Money supply
loan is asset to bank and liability to…
loanee
What is MPS
Change in savings/ Change in disposable income
interest rate effect
people see prices rise, then people stop buying and save… in return loans become less expensive
what is a loan
a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.
What are the 5 functions of the FED
-promote max employment
-promote stability of the financial system
-safety of individuals financials
-fosters safety of banking system
-promotes community employment
Nominal interest rate is with or without inflation?
Without
Spending multiplier equation
1/1-MPC = 1/MPS = Spending Multiplier
exchanged rate effect
other countries do not want goods at a higher price