Unit 7

Balance of payment- measures the inflows and outflows between the united states and the rest of the world.
Inflows=credits
outflows=Debits
The balance of payments is divided into the 3 accounts
1) current account
2)capital/Financial account
3)Official Reserves
Real=Real estate& Financial assets= stocks
Current account

• Balance/Net exports= (exports-Imports) 
• (exports is a credit/assets)
• (Imports is debit/liability)
• Net foreign income/foreign investment- income earned by US owned foreign assets and Income paid to foreign held US assets
• Net Transfers/Foreign Aid=(Humanitarian effort 

Official/Reserves

• Foreign currency holding of the US federal reserve bank balance of payments
• official Reserves should zero out to the balance of payments 

Capital/Financial account

• balance of capital ownership includes the purchases of real and financial assets
• Direst investment in US is a credit to the capital account ex;( Toyota factory in Florida)
• Direct investment by US firms individuals in a foreign country or debits to the capital account ex(dell in Costa Rica  
• purchases of foreign financial assets represent a debit to a capital account.ex(Venezuela a large steak in Walmart
• current and capital account should each zero other out                                                                                                                                                                       

Unit 4

cash deposits from the public is called (dd)

Expansionary policy is used for a recession

• Ms increases
• Reserve ratio decreases 
• discount rate decreases 
• OMO buy bonds
• More money supply

Contractionary policy is used for inflation

• Ms decreases 
• Reserve ratio increases
• discount rate decreases  
• OMO sell bonds
• less money supply

Prime rate- rate that charges the most credit worthy customers

Loanable funds-Market where buyer and savers are

Equations:

 actual reserve -required reserves=ER

1/RR= Money multiplier

ERxMM=new loans

DD=RR+ER

• Deposits in a bank are called liabilities
• Federal fund rate is when banks offer an overnight loan (24)
• ER is the only money that can be loaned
• money that's directly deposited from the Fed into federal reserves automatically becomes a part of the money supply.

Unit 3

unit 3

Fiscal policy- encourages full employment, economic, as well price stability
-government controls fiscal policy
changes in the expenditures of tax revenues of the federal govt. in Texas govt. could increase or -decrease taxes
-spending government
-it increases

Budget balance is equal to expenditure
Budget defecit revenues greater than expenditure
Bufget surlpus less than expenditure
Govt debt sum of all expenditures surplus

Two types of fiscal policy: expansionary and contractionary
 -Contractionart fiscal policy- helps contil inflation
 -Decreases govt. spending
 -Expansionary fiscal policy- helps recession 
- increase govt. spending,decreases taxes

Automatic &stabilizers
things that help the budget during a recession by increasing govt spending and etTax System
Types of taxes
 -progressive- the gdp rises and the tax rate
-Regressive- avg tax stays constant  
-Proportional-avg tax falls and gdp 
Type of transfer payments:

• Welfare checks
• Food stamps 
• Unemployment checks 
• Corporate dividends 
• Social security 
• Veterans benefits 

Unit 2 Unemployment

Unemployment- Failure to use available resources, particularly labor to produce desires goods and services.
Population- # of people in a country
Labor force- # of people in a country that are classified  as employed or unemployed

Groups
1st group-employed
16+ that have a job at least 1hr every 2 weeks.
2nd group-unemployed
people 16+ who do not have a job but searched for a job in the last 2 weeks.
3rd-Not in labor Force
kids, full time students, Retirees, disabled, mentally, institutionalized people, incarcerated, military, home makers, discouraged workers.

Unemployment Rate
# of unemployed / Total labor force times 100
Types of unemployment

1. Frictional- Temporary employed "in between Jobs"
2. Seasonal- working certain time of the year
3. Structural- Changes in the structure of the labor free market some skills obsolete
4. Cyclical- As demand and services fall demand and labor falls workers are laid off

*Creative destruction- As new jobs are created old jobs are loss.

      

Rules:

Okuns law- For every 1% in which actual employment exceeds the natural rate of unemployment falls by 2%

Rule of 70- The # of yrs. it takes for GDP to double if the annual inflation rate is 2% how many years will it take for real GDP to double 

GDP- Gross domestic profit

Graphing

From what we have been doing in class I've noticed that in the graphs the supply and demand lines are constant and when dealing with supply the quantity is directly effected unlike when just working with demand.

This is Devyn Lee's blog thanks for paying it a visit, be sure to be open, honest and concise so we can all have an educated discussion among-st ourselves class.😉😆