ECO 2301 Test 3 Review - ECO 2301 Test 3 Review Asset or...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
ECO 2301 Test 3 Review Asset or speculative demand - wealth composed of bond and money Transaction demand - money necessary for buying things Monetarism - monetary policy should be limited to a steady growth in the money supply based on the growth in potential GDP; analysis of the economy that places a great emphasis on the velocity of money (the number of times a dollar bill changes hands in a year. V=GDP/M= (P*Y)/M. M*V=P*Y Laffer Curve - shows there is some tax rate beyond which the supply response is large enough to lead to a decrease in tax revenue for further increases in the tax rate Exhaustible resource - Accommodating monetary policy - preventing crowding out Crowding out - tendency for increases in government spending to cause reductions in private investment spending Internal rate of return - Club of Rome - Federal funds rate - the rate banks are charged to borrow reserves from other banks Inflation rate - percentage change in the price level Aggregate supply
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/30/2008 for the course ECO 2302 taught by Professor Smith during the Spring '08 term at University of Texas at Dallas, Richardson.

Page1 / 2

ECO 2301 Test 3 Review - ECO 2301 Test 3 Review Asset or...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online