Economics
Date Submitted: 10/05/2002 04:29:55
Category: / Law & Government / Government & Politics
Length: 3 pages (941 words)
Category: / Law & Government / Government & Politics
Length: 3 pages (941 words)
Money-commodity money, Fiat. Money supply=currency in hands of public+other assetsas means of payment (demand deposits, traverler's checks, savings accounts, time deposits, mutual funds)
M1=currency in hands of public+traverler's checks+demand deposits+other checkable deposits CU+CD
M2= M1+savings account+small time deposits(<100,000),+non institutional(retail)money mkt. mutual funds
M3= M2+Large term deposits(not insured)+institutional money market mutual funds+long term repos(repurchaseagreements, gov't securities)+Long term euro …
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…increased riskiness of stocks
If actual int rate is below equil int rate, Price of bonds will decrease
In Short run purchase of bonds-will lower int rate, increase spending, increase output
If price of oil inc- AS will inc due to decline in wages, returning economy to full employment.
short run decrease in gov't purchases-decrease real GDP because of multiplier effect. declinde will be lessened by decrease in the price level and the interest rate.
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