Structural Unemployment: The Theory of Efficiency Wages
Efficiency wages are
Case Study: Henry Ford and the Very Generous _-a-Day Wage in 1914
Henry Fords policy of paying people high wages is consistent with efficiency-wage theory.
This chapter has analyzed unemployment - its measure and causes. Since unemployment can
impose unusual hardships on individuals and families, it is an important concern of policymakers.
Public policies toward labor markets have had conflicting
they make fewer loans, and money supply falls.
and bank behavior to retain fairly precise control over the money supply.
Bank Runs and the Money Supply
When there is a run o
Besides these types of money, other things provide some of the functions of money and are called
"near-monies." These financial assets include noncheckable savings deposits, time deposits
(a.k.a. certificates of deposit or CDs), and short-term government
The Monetary System
From this chapter, students should:
understand the nature and functions of money;
learn what the role of the Federal Reserve is;
know how money is created in our banking system; and
understand how the Federal Reserve uses it
The Kinds of Money
Money on the Island of Yap
Yap is in Micronesia. Limestone is used as money there. The limestones are fashioned
into large wheels.
Money in the U.S. Economy
Definition of the money stock/money supply - the quantity of money c
11-3 Banks and the Money Supply
The behavior of banks can influence the quantity of demand deposits in the economy, and
therefore, the money supply.
The Simple Case of 100-Percent-Reserve Banking
If banks hold all their deposits in reserve, they have no i
The Feds Tools of Monetary Control/ How the fed controls money supply
The Fed controls the money supply by using three tools to influence the amount of money in the
banking system. Money supply is :_
This is an important concept so jolt down your notes be
1. Discount rate
Problems in Controlling the Money Supply
There are two problems that prevent the Fed from having better control of the money supply
1. The Fed does not control the amount of money that households choose to hold as