Marcoeconomics an der FHNW - Fachhochschule Nordwestschweiz | Karteikarten & Zusammenfassungen

# Lernmaterialien für Marcoeconomics an der FHNW - Fachhochschule Nordwestschweiz

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TESTE DEIN WISSEN

Which of the following assets would you classify as being the most liquid?

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demand deposits

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What is Keynesian economy

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Economic slumps are caused by inadequate spending, and they can be
mitigated (abgeschwächt) by government intervention.

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As the financial crisis showed us, there are many large financial firms that don’t accept deposits—so aren’t covered by insurance or regulation that make conventional banks safer.

– investment banks

– insurance companies

– hedge fund companies

– money market fund companies

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TESTE DEIN WISSEN

Suppose the required reserve ratio initially is 10% of bank deposits and is increased by the Fed to 20% of bank deposits. Holding everything else constant, this will:

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Only half of M1 is currency; where does the rest of the money supply come from?

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Bank deposits make up half of M1 and most of M2.

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How do banks create money?

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by accepting deposits and making loans, banks and other financial institutions are also able to create money.

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Why is the actual money multiplier smaller?

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The money multiplier is the ratio of the money supply to the monetary base.

In normal times, the U.S. money multiplier for M1 is between 1.5 and 3.0.

– Why isn’t it 1/0.1 = 10?

• People hold significant amounts of cash, which reduces bank deposits.
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What is a T-Account?

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a tool for analyzing a business's financial position by showing the business's assets and liabilities.

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Bank regulation: Deposit Insurance

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Deposit insurance: a guarantee that a bank’s depositors will be paid even if the bank can’t come up with the funds

- The FDIC (Federal Deposit Insurance Corporation) currently guarantees the first \$250,000 of each account for member banks

- The FDIC started to operate January 1st 1934

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Definition of bank reserves

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The currency that banks hold in their vaults, plus their deposits at the Federal Reserve

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What banks do?

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Banks are financial intermediaries that use liquid assets (in the form of bank deposits) to finance the illiquid investments of boeeowers.

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What is the nominal GDP?

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The value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced.

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## Beispielhafte Karteikarten für deinen Marcoeconomics Kurs an der FHNW - Fachhochschule Nordwestschweiz - von Kommilitonen auf StudySmarter erstellt!

Q:

Which of the following assets would you classify as being the most liquid?

A:

demand deposits

Q:

What is Keynesian economy

A:

Economic slumps are caused by inadequate spending, and they can be
mitigated (abgeschwächt) by government intervention.

Q:

A:

As the financial crisis showed us, there are many large financial firms that don’t accept deposits—so aren’t covered by insurance or regulation that make conventional banks safer.

– investment banks

– insurance companies

– hedge fund companies

– money market fund companies

Q:

Suppose the required reserve ratio initially is 10% of bank deposits and is increased by the Fed to 20% of bank deposits. Holding everything else constant, this will:

A:

Q:

Only half of M1 is currency; where does the rest of the money supply come from?

A:

Bank deposits make up half of M1 and most of M2.

Q:

How do banks create money?

A:

by accepting deposits and making loans, banks and other financial institutions are also able to create money.

Q:

Why is the actual money multiplier smaller?

A:

The money multiplier is the ratio of the money supply to the monetary base.

In normal times, the U.S. money multiplier for M1 is between 1.5 and 3.0.

– Why isn’t it 1/0.1 = 10?

• People hold significant amounts of cash, which reduces bank deposits.
Q:

What is a T-Account?

A:

a tool for analyzing a business's financial position by showing the business's assets and liabilities.

Q:

Bank regulation: Deposit Insurance

A:

Deposit insurance: a guarantee that a bank’s depositors will be paid even if the bank can’t come up with the funds

- The FDIC (Federal Deposit Insurance Corporation) currently guarantees the first \$250,000 of each account for member banks

- The FDIC started to operate January 1st 1934

Q:

Definition of bank reserves

A:

The currency that banks hold in their vaults, plus their deposits at the Federal Reserve

Q:

What banks do?

A:

Banks are financial intermediaries that use liquid assets (in the form of bank deposits) to finance the illiquid investments of boeeowers.

Q:

What is the nominal GDP?

A:

The value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced.

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