Economics Unit 15: The Federal Reserve System

circulation – the use or trading of money (money is being circulated throughout the land.. being used.)
Eminent domain – The power of the government to seize property it intends to use for some public purpose
Government Spending – Spending by the central government and local government on goods and services
Natural resources – Gifts of nature
A fixed exchange rate – Is an exchange rate regime where the value of a currency is fixed, or pegged, to the value of another currency, to the average value of a selection of currencies, or to the value of some other commodity such as gold.
What is a budget – A plan of expected future income and expected future spending for a set period of time
negative externalities – by-products of production or consumption that impose costs on third parties, neither buyers nor sellers
Automation – the use of automatic equipment to make goods
Point of equilibrium – Where the supply and demand curves intersect
Market – An organized way for products and consumers to trade goods and services
Governments grant patents to encourage
entrepreneurship – the factor of production that brings together the other three factors of production with the aim of making profit. Entrepreneurship tends to involve risk taking
Shifts on Supply Curve – depends on Input prices, Technology, # of sellers, and expectations
What is the FDIC? – insures commercial bank accounts
trade diversion – Occurs when the entry of a country into a customs union leads to the production of a good moving from a low-cost producer out-side the union to a high-cost producer inside the union.
Gоvernments grаnt pаtents tо encоurаge
quantity equation – M x V = P x Y
Demand – The amount of a good or service that consumers are willing and able to purchase at a particular point in time
Supply – Is the amount of a good or service that producers are willing and able to sell at a certain price

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