What would the Fed need to do with the reserve ratio in order to decrease the money
supply and aggregate demand in the economy?
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Increase the reserve requirements; therefore raising the reserve ratio.
Consumer surplus
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The amount a buyer is willing to pay for a good minus the amount the buyer
actually pays for it
,Cross-price elasticity
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A measure of how much the quantity demanded of one good responds to
a change in the price of another good. Computed as the percentage
change in quantity demanded of the first good divided by the percentage
change in price of the second good. Substitutes=positive cross-price
elasticity; complements=negative cross-price elasticity.
Classical theory view
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Static
Transaction risk
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The exchange rate risk associated with the time delay between entering
into a contract and settling it.
Dead weight loss.
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, The fall in total surplus that results from a market distortion, such as a tax
(new equilibrium price that is settled for the transaction will be higher and
therefore some burden of this will be passed on to the consumer)
Unit elastic
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Percentage change in quantity equals the percentage change in price.
"Evolutionary" view on globalization
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A long-run historical evolution since the dawn of human history
What would the Fed need to do with the reserve ratio in order to increase the money
supply and aggregate demand in the economy?
Give this one a try later!
Decrease the reserve requirements; therefore lowering the reserve ratio.
How might an oligopolistic firm behave like a monopoly? What forces may prevent
this?
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Forming a cartel and acting like a monopolist, but self-interest drives them
towards competition.
Results from income elasticity
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(1) Necessities, such as food and clothing, tend to have small income
elasticities.
(2) Luxuries, such as caviar and diamonds, tend to have large income
elasticities.
Reserve ratio
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The fraction of total deposits that a bank holds as reserves.
Four properties of an indifference curve
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(1) Higher indifference curves are preferred to lower ones. People usually
prefer to consume more goods rather than less.
(2) Indifference curves are downward sloping. The slope of an indifference
curve reflects the rate at which the consumer is willing to substitute one
good for the other.
(3) Indifference curves do not cross.
supply and aggregate demand in the economy?
Give this one a try later!
Increase the reserve requirements; therefore raising the reserve ratio.
Consumer surplus
Give this one a try later!
The amount a buyer is willing to pay for a good minus the amount the buyer
actually pays for it
,Cross-price elasticity
Give this one a try later!
A measure of how much the quantity demanded of one good responds to
a change in the price of another good. Computed as the percentage
change in quantity demanded of the first good divided by the percentage
change in price of the second good. Substitutes=positive cross-price
elasticity; complements=negative cross-price elasticity.
Classical theory view
Give this one a try later!
Static
Transaction risk
Give this one a try later!
The exchange rate risk associated with the time delay between entering
into a contract and settling it.
Dead weight loss.
Give this one a try later!
, The fall in total surplus that results from a market distortion, such as a tax
(new equilibrium price that is settled for the transaction will be higher and
therefore some burden of this will be passed on to the consumer)
Unit elastic
Give this one a try later!
Percentage change in quantity equals the percentage change in price.
"Evolutionary" view on globalization
Give this one a try later!
A long-run historical evolution since the dawn of human history
What would the Fed need to do with the reserve ratio in order to increase the money
supply and aggregate demand in the economy?
Give this one a try later!
Decrease the reserve requirements; therefore lowering the reserve ratio.
How might an oligopolistic firm behave like a monopoly? What forces may prevent
this?
, Give this one a try later!
Forming a cartel and acting like a monopolist, but self-interest drives them
towards competition.
Results from income elasticity
Give this one a try later!
(1) Necessities, such as food and clothing, tend to have small income
elasticities.
(2) Luxuries, such as caviar and diamonds, tend to have large income
elasticities.
Reserve ratio
Give this one a try later!
The fraction of total deposits that a bank holds as reserves.
Four properties of an indifference curve
Give this one a try later!
(1) Higher indifference curves are preferred to lower ones. People usually
prefer to consume more goods rather than less.
(2) Indifference curves are downward sloping. The slope of an indifference
curve reflects the rate at which the consumer is willing to substitute one
good for the other.
(3) Indifference curves do not cross.
