i have a test coming up and i need help with a few questions. dont have to answer all of them. just a few works. thanks. really appreciate it.
Review Sheet
Ch 1-11 refer to your test and past review sheet.
Ch. 12 – Money & Banking
•What are the functions of money? Be able to apply it as an example (i.e. money is used as a unit of account when calculating GDP).
•What does M1 include? What does M2 include?
•What is the purpose of the Federal Reserve Bank?
Ch. 13 – Money Creation
•What did the goldsmiths realize about people depositing gold?
•What are the characteristics of the fractional reserve banking system?
•What is a balance sheet? For a single commercial bank what shows up as assets and liabilities? What is the reserve ratio?
•What are excess reserves? Why are they important?
•What are securities?
•What is the money multiplier?
Ch. 14 – Interest Rates & Monetary Policy
•What does the total demand for money consist of?
•For the Fed what shows up as assets/liabilities?
•For what purpose would the government BUY securities? For what purpose would they SELL securities?
•On the balance sheet of the FED and a Commercial Bank, how do reserves show up? (asset, liability?)
•What are the three tools of monetary policy?
•How does changing the reserve ratio affect the money multiplier?
•What is the discount rate?
•What is the federal funds rate?
•What is expansionary monetary policy? How does it work? What are the sequence of events that happen? Also what is contractionary or restrictive monetary policy?
Ch. 15– Extending the Analysis of Aggregate Supply
•What is the difference between the long-run an short-run?
•What changes in the long-run that isn’t able to change in the short-run?
•What is stagflation? What is one example of stagflation?
•What is the Phillips curve? What does it look like?
•What is the laffer curve? What does it look like? What are some criticisms of the laffer curve?
Ch. 16– Economic Growth
•What are the four supply factors and the demand and efficiency factor?
•How does economic growth look like on a production possibilities curve?
•What are some reasons for growth? Which reason accounts for the biggest percentage of labor productivity growth?
•What are some reasons for productivity acceleration? Which one is the core element?
•What are some reasons for growth? Some reasons against growth?
Ch. 16w – Economics of developing countries?
•Where are most developing countries located?
•What are Industrially advanced countries? What are Developing countries?
•What are the characteristics of IACs and DVCs?
