card 2 for economics - M2- M1 + savings deposits/small time...

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15/Unemployment measures either employed/unemployed/not in labor force. Employed=spent most of previous week working at paid job/unemployed=temporary layoff, looking for job, waiting for start date/not in force=fits none of above, student, homemaker, or retiree. Unemployment rate= (# employed)/(labor force) X 100 / labor force=employed+unemployed. LFP= (labor force)/(adult population) X 100 Why Are There Always Some People Unemployed? In an ideal labor market, wages would adjust to balance the supply and demand for labor, ensuring that all workers would be fully employed. Reasons for an Above-Equilibrium Wage/ Minimum-wage laws/ Unions /Efficiency wages 16/three functions of money-medium of exchange/unit of account/store of value M1-demand deposits/travelers checks/other checkable deposits/currency
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Unformatted text preview: M2- M1 + savings deposits/small time deposits/money market mutual funds/few minor catagories Federal Reserve (Fed) regulates banks, insures health of system, controls money supply through open market operations. FOMC is in fed, meets 6 weeks/ banks make loans, money supply increases Fed controls money supply through open market operations/reserve requirement/discount rate Open marketbuying/selling bonds, reserve requirement- fraction of banks reserves that may not be loaned Discount rate- interest rate Fed charges banks for loans, increase in last 2 = less money supply, opp=opp Problems-people keeping their money, banks not loaning all or loaning too much, etc....
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This note was uploaded on 04/17/2008 for the course ACG 2021 taught by Professor Hornik during the Spring '08 term at University of Central Florida.

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