- Module 27.1: Assume that any money lent by a bank is deposited back into the ban...
- Module 27.2: Which of the following financial services does the Federal Reserve ...
- Module 27.3: When the Fed makes a loan to a commercial bank, it charges a. no in...
- Module 27.4: If the Fed purchases U.S. Treasury bills from a commercial bank, wh...
- Module 27.5: When banks make loans to each other, they charge the a. prime rate....
Solutions for Chapter Module 27: The Federal Reserve System: Monetary Policy
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
the limit on the consumption bundles that a consumer can afford
diminishing marginal product
the property whereby the marginal product of an input declines as the quantity of the input increases
something that induces a person to act
the revenue the government raises by creating money
the regular pattern of income variation over a person’s life
a tax that is the same amount for every person
a small incremental adjustment to a plan of action
market for loanable funds
the market in which those who want to save supply funds and those who want to borrow to invest demand funds
a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms
negative income tax
a tax system that collects revenue from high-income households and gives subsidies to lowincome households
goods that are both excludable and rival in consumption
a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries
quantity theory of money
a theory asserting that the quantity of money available determines the price level and that the growth rate in the quantity of money available determines the inflation rate
rivalry in consumption
the property of a good whereby one person’s use diminishes other people’s use
store of value
an item that people can use to transfer purchasing power from the present to the future
tax on goods produced abroad and sold domestically
the idea that taxpayers with a greater ability to pay taxes should pay larger amounts
the price of a good that prevails in the world market for that good