Poli. 100 Notes 8

Poli. 100 Notes 8 - Horizontal (loopholes, policy based...

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Economics Fiscal Policy Use of government spending in combination with tax policy for the purpose of influencing the overall performance of the national economy Monetary Policy Use of governments ability to control the supply and availability of money for the purpose of influencing the overall performance of the national economy Techniques of monetary control Reserve requirements The reserves member banks must maintain against their deposits in banks Discount Rate The interest rate at which the Fed lends money to commercial banks Tax Policy Consumption versus income Vertical (progressive, flat, and regressive)
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Unformatted text preview: Horizontal (loopholes, policy based incentives) Estate or death taxes Current Account=Kapital account Current Account = Exports Imports GDP = C+I+G+Nx Current Account = Nx Absolute Advantage (Adam Smith): You make multiple things better than everybody else Implication: Specialize in everything Comparative Advantage (David Ricardo): Even if you have absolute advantage in both goods, you should specialize in the best of the two, let others specialize in the other ones, then trade Coats Macs US 10 10 China 20 100 US should specialize in Macs, China should specialize in coats...
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This note was uploaded on 05/16/2011 for the course POLI 100 taught by Professor Rabinowitz during the Fall '07 term at UNC.

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Poli. 100 Notes 8 - Horizontal (loopholes, policy based...

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