Economics matching
target price
a socially desirable price determined by factors other than the market
deficiency payment
check sent to producers that make up the differences between the actual market price and the target price
legal reserves
coins and currency that depository institutions hold in their vaults plus deposits they have placed in FED district banks
balance sheet
condensed statement showing all assets and liabilities
bank holding company
corporation that owns one or more banks
liabilities
debts and obligations to others
member bank reserve
deposit a member bank keeps at the Fed
Free enterprise economy
economy in which consumers and privately owned businesses make the majority of the WHAT, HOW, and FOR WHOM decisions
discount rate
interest rate the fed charges on loans to financial institutions
Regulation Z
law giving the Fed authority to extend truth-in-lending disclosures to people borrowing from corporations, retail stores, automoblie dealers, and lending institutions
capital good
manufactured goods that are used to produce other goods
real rate of interest
market rate of interest minus the rate of inflation
factor market
market where productive resources are bought and sold
Price ceiling
maximum legal price that can be charged for a product
price
monetary value of a product
liquidity
potential to be converted into easy cash
equilibrium price
price that produces neither a surplus nor a shortage
market equilibrium
prices are relatively stable, and quantity supplied is equal to quantity demanded
production
process of creating goods and services
consumption
process of using up goods and services to satisfy wants and needs
shortage
quantity demanded is greater than quantity supplied
surplus
quantity supplied is greater than quantity demanded at a given price
Economic model
set of assumptions and/or relationships that can be used to help analyze behavior and predict outcomes
Durable good
Any good that last three years or more when used regularly
Need
Basic requirement for survival
Production possibilities frontier
Diagram representing various combinations of goods and/or services that an economy can produce when all productive resources are fully employed
easy money policy
Fed plan to allow the money supply to grow and interest rates to fall
ration coupon
ticket that entitles the holder to a certain amount of a product
want
way of expressing a need that leads to a preference for some goods over others
service
work that is performed for someone