econ 224

Population Means, Related Samples: Same group before vs. after treatment ​

The marginal propensity to consume (MPC) is the fraction of each additional (marginal) dollar of disposable income spent on consumption The fiscal stimulus to aggregate demand includes:​ The initial increase in government spending.​ All subsequent increases in consumer spending are triggered by government outlays.​ Income gets spent and re-spent in the circular flow.​

A manufacturer says their football helmets have no more than 10% defects. A researcher claims that more than 10% (0.10) of all football helmets have manufacturing flaws that could potentially cause injury to the wearer.

Each new loan made creates new deposits and new excess reserves.​ Cumulative effect on money supply is determined by the money multiplier.​ The money multiplier is the value of deposits created from $1 of excess reserves.​

The use of money and credit regulations to increase or decrease the money supply in order to influence macroeconomic activity, i.e. AD​ The money supply is controlled by the Federal Reserve System, the central bank of the US.​ Referred to as the Fed.​ .​ System of 12 regional Fed banks and central controls, headed by a chairman The Board of Governors conducts monetary policy.​ Seven members appointed by the President and confirmed by the U.S. Senate.​

Specialization increases total output​ We can have more “stuff” if we specialize our production and then trade​ We are incapable of producing all that we desire.​ We have limited amounts of time, energy, and resources.​