Daily current events –
Population – population of earth is 6 bill in 2000, 1900- less than 2, know this the price of food is
going up = major issue, which countries have done something about it? China, India, Russia
(trying to increase pop. Russian women aren’t having kids), China, India, Russian, and Brazil
Banking – 3 ways we can run bank, standard = fed interacts with the 1
, loan goes into 2
then to the
way = everything happens in the first bank, take number from end of first
bank put them in the front of the 2
way = fed could buy or sell securities from a rich
person, effect = the rich individual then deposits or withdrawals money from a bank, there is no
bank 1 and everything starts with deposit or withdrawal, makes deposit then the process starts
with step 2 from the notes.
IS/LM – balance budget question – dG=dT+a= initial difference between d and t.
, if t and g are not equal initial, initial difference between d and t.
Addition calculations – know deficit, difference between input and output…taxes, compute
interest rate, figure out I find group, straight algebra.
Changes that have take place
1980s fed has been concerned with inflation targeting(keep inflation from coming back), since
then policy has been to keep inflation away, Bernake had problem, possibility investment banks
would collapse, Fed is now the lender of last resort ( JP Morgan pushed government to create a
central bank) did terrible job allowed 1/3 of the banks to fail, Bernake is in hot seat given the