- Module 26.1: What are the similarities between the Panic of 1907, the S&L crisis...
- Module 26.2: Why did the creation of the Federal Reserve fail to prevent the ban...
- Module 26.3: Which of the following is NOT a role of the Federal Reserve System?...
- Module 26.4: Who oversees the Federal Reserve System? a. Congress b. the preside...
- Module 26.5: Which of the following contributed to the financial crisis of 2008?...
Solutions for Chapter Module 26: Banking and Money Creation
Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition
a curve that shows the quantity of goods and services that households, firms, the government, and customers abroad want to buy at each price level
Arrow’s impossibility theorem
a mathematical result showing that, under certain assumed conditions, there is no scheme for aggregating individual preferences into a valid set of social preferences
a visual model of the economy that shows how dollars flow through markets among households and firms
a graph of the relationship between the price of a good and the quantity demanded
diseconomies of scale
the property whereby long-run average total cost rises as the quantity of output increases
total revenue minus total cost, including both explicit and implicit costs
federal funds rate
the interest rate at which banks make overnight loans to one another
law of demand
the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises
median voter theorem
a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter
the amount of money the banking system generates with each dollar of reserves
a good for which, other things being equal, an increase in
the amount a seller is paid for a good minus the seller’s cost of providing it
the relationship between quantity of inputs used to make a good and the quantity of output of that good
the amount of a good that buyers are willing and able to purchase
the theory that people optimally use all the information they have, including information about government policies, when forecasting the future
people who systematically and purposefully do the best they can to achieve their objectives
regulations on the minimum amount of reserves that banks must hold against deposits
society’s understanding of the best ways to produce goods and services
an excess of imports over exports
a government program that partially protects workers’ incomes when they become unemployed