The Free essays given on our site were donated by anonymous users and should not be viewed as samples of our custom writing service. You are welcome to use them to inspire yourself for writing your own term paper. If you need a custom term paper related to the subject of Accounting or Econ, you can hire a professional writer here in just a few clicks.
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(M3= M2+Large term deposits(not insured)+institutional money market mutual funds+long term repos(repurchaseagreements, gov't securities)+Long term euro dollar deposits. Balance Sheet Assets= Cash in vault 1mil. Balance at Fed 5 mil.=reserves6mil. Bonds 10 mil. Loans 50 mil. Buildings 20 mil. Total Assets=86 mil. Liabilities=60mil. Savings deposits 10mil. Total Liab=70 mil Net worth= TA-TL=16 mil. Money sup= CU+[1/RRR]*(reserves) RRR=% of demand deposits Fed requires banks to hold as cash RRR=10% (.10)(60m)=6.0 RRRDD=res. DD=[1/RRR] (reserves) 1/RRR is demand deposit multiplier Probs. time lag+exact control over change depends on banks lending IF RRR dec, Ms would inc Chang in Ms=1/rrr(change in reserves) Money sup.=CU+DD or CU+[1/RRR]*(reserves) IF RRR inc Money sup dec. If RRR dec money inc. How Fed changes Money sup. 1 RRR 2. Buy sell bonds (Open market operations) How Fed dec Money sup-open market sales, inc RRR, inc the discount rate If taxes cut-Fed make open market sales to lower Ms 3. Discount Rate=rate at which banks can borrow from Fed. If discount rt. inc. banks's cost of funds inc., they borrow less =Money sup dec. If RRR=.2 and gov't buys 10 mil in bonds Ms inc by 50 mil Money Demand= Income +, Prices +, Interest rate inc Money demand dec. Equilibrium=Md=Ms EX. Ms=500 Md=530-300r r=.10 Fed inc Ms=Ms>Md excess supply of money=excess demand for bonds If Fed sells Bonds=Ms dec, int rate inc. price of bonds dec. Bank reserves dec. If money kept out of bank=Ms dec since DD dec Money demand curve shift right- if GDP,income, or the price level increases. IF Int rate is higher than equil.= excess supply of moneyand demand for bonds, price bonds inc., int rate dec. IF Int rate is lower than equil=Excess demand for money and supply of bonds, price bonds dec, int rt inc If FED buys bonds=Ms inc, Excess of money and demand for bonds, price bonds inc, int rt dec. real GDP inc Initial[Ms dec, r inc, I dec, a dec, Y dec] response[Md dec, r dec, I inc, a inc, Y inc] end result Y dec r inc r=Auto Stabilizer Initial[T dec, a inc, AE inc, Y ic] response[Md inc, r inc, I dec, a dec, Y dec] End result= Y inc, r inc I dec, and a is ambiguous. T dec=(G-T) deficit. Auto Stabilizers=taxes (income), transferpayments, prices, imports, foward looking behavior Aggregate demand curve-tells the equilibrium real GDP at any price level. P-Y reletionship when goods and money market are in Equil. INC in Ms-AD shifts right DEC in Ms shift AD left AD shifts rightward-gov't purchases, investment, autonomous, or net expeort inc. or taxes dec. AD shifts Leftward-gov't purchases, investment, autonomous, or net exports dec, or when taxes inc. If price inc.=inc in Md interest rate inc., and Equil GDP dec. If prices dec=decrease in money supply, interest rate dec, Equil GDP inc. Aggregate Supply-P-Y reletionship when input(factor) markets are in Equil. As total output Increases-Greater amounts of inputs may be needed to produce a unit of out put, Price of non labor input rises, Nominal wage rises. in short run, inc in real GDP, by causing unit cost to inc, price inc OIL-higher oil prices AS shift up WEATHER-Good=shift down, bad=shift up TECHNOLOGY-improvments=AS shift down Basic Pricing Model-(1+% markup over cost)(marginal cost) if % markup =0 perfect= competition Gov't Purchases inc-Fiscal policy-AE inc, Y inc, Md inc, r inc, P inc, AD inc, P inc LR: If Yun, wages dec, P inc, AS shift down return to Yfe Stagflation-high unemployment and high inflation (result of negitive supply shocks) Demand Shocks-caused by spending shocks or by change in monetary policy G INC, GDP inc, Unit cost inc, P inc, Md inc, Int. rt inc, a and Ip dec, =Gdp inc, but less cause P inc Ms INC, r dec, a and Ip inc, GDP inc, Unit cost inc, P inc, Md inc, r inc, a and Ip dec, GDP dec.=GDP inc but by less cause of P inc Positive demand shock-shift AD right, inc, both real

Our inspirational collection of essays and research papers is available for free to our registered users

Related Essays on Accounting

Buisness Plan

were it say my name add yours Peaks and CreeksIncorporation or Business Form Peaks and Creeks is a sole proprietorship format of business form because it is a small and easily run business....


Christy’s Lemonade Stand START-UP On the first Saturday after school is out, Christy and her family go to the park for a picnic. After lunch, Christy, who is eight years old, takes a ...

Looking For Happiness

Looking for Happiness In 1993, I decided to get married. In 1997 I decided to get divorced. While marriage and divorce are completely opposite occasions, in a few significant ways, getting a divo...

Toys "R" Us And Subsidiaries

Running Head: Toys "R" Us Financial Analysis Toys "R" Us and Subsidiaries Financial Statement Analysis MC500 Management Accounting Sherri K. Thomas City University, Tacoma May 22, 1999 ...

Nike Analysis

Nike Financial Analysis Investing in a company has certainly changed over the years. Financial information is literally at one?s fingertips via the internet. In today?s fast paced corp...

Traditional Industries Case Studies

Traditional Industries Case studies Purpose: To analyze the cause and effect of the significant drop of Traditional Industry¡¯s (¡°Traditional¡±) 1989 net income, from 1988 record br...

В интеренете нашел полезный блог со статьями про купить мазда 3
Нашел в интернете классный сайт на тематику
купить кухню под заказ