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Chapter 29. Rohith Jayakumar. Main points. - The unemployment rate is the percentage of those who would like to work who do not have jobs. The unemployment rate is not a measure of people who do not have jobs, it is a measure of people who are in the work force who do not have jobs.
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Chapter 29 Rohith Jayakumar
Main points • -The unemployment rate is the percentage of those who would like to work who do not have jobs. • The unemployment rate is not a measure of people who do not have jobs, it is a measure of people who are in the work force who do not have jobs. • The Federal Reserve is the Central Bank of the U.S.
In the U.S economy money takes the form of currency and various types of bank deposits such as checking accounts. • When banks loan out money, they increase the money supply. • Commodity money such as gold has intrinsic value. • The fed’s main method of controlling the money supply is through buying and selling government bonds. Selling bonds decreases the money supply, buying bonds increases the money supply.
Main Points • The overall level of prices in an economy adjusts to bring money supply and money demand into balance. • The principle of monetary neutrality states that changes in the quantity of money changes nominal variables but not real variables. • People do not necessarily lose money due to inflation because as inflation increases nominal incomes increases as well.
