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| the process of finding present value of a future sum of money |
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| people dislike bad things happening to them |
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| a person's subjective measure of well-being or satisfaction |
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| a regular income every year until you die |
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| a high-risk person is more likely to apply for insurance than a low-risk person because a high-risk person would benefit more from insurance protection |
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| after people buy insurance, they have less incentive to be careful about their risk behavior because insurance will cover them |
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| the reduction of risk achieved by replacing a single risk with a large number of smaller, unrelated risks |
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| risk that affects only a single company |
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| risk that affects all companies in the stock market |
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| the price is less than the value |
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| the price is more than the value |
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| the price and value of stock are equal |
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| the study of company's accounting statements and future prospects to determine its value |
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| cash payments that a company makes to its shareholders |
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| efficient markets hypothesis |
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| the theory that assets prices reflect all publicity available information about the value of an asset |
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| the description of asset prices that rationally reflect all available information |
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| random walk of stock prices |
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| the path of a variable whose changes are impossible to predict |
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Definition
| result from the process of matching workers and jobs |
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| quantity labor supply exceeded quantity labor demand |
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| process of matching workers with appropriate jobs |
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| changes in the composition of demand among industries or regions |
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| process by which unions and firms agree on the term of employment |
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| give workers in unionized firm the right to choose whether to join a union |
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| set of assets in the economy that people regularly use to buy goods and services from each other |
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| an item that buyers give to sellers when they purchase goods and services |
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| yardstick people use to post prices and record debts |
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| item that people use to transfer purchasing power from the present to the future |
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| the ease of which asset can be converted into the economy's medium of exchange, selling a house, old baseball card are less liquid |
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| when money takes the form of commodity with intrinsic value, example: gold |
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| money with out intrinsic, an order or decree, government put the value into the paper |
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| the quantity of money circulating in the economy |
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| the paper bills and coins in the hand of the public |
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| balances in bank accounts that depositors can access on demand simply by writing a check or use their debit cards |
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| institution designed to oversee the banking system and regulate the quantity of money in economy |
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Term
| how many members are in Fed reserve and most important? |
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Definition
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Term
| two jobs of the Fed reserve |
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Definition
regular banks and ensure the health of the banking system, lender of last resort - lender to those who cannot borrow anywhere else
Control the quantity of money that is made available in the economy |
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Definition
| the quantity of money available in the economy |
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| the setting of money supply by policymakers in the central bank |
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| the purchase and sale of US government bonds |
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| deposits that banks have received but have not loaned out |
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Definition
| banking system in which banks only keep a fraction of deposits as reserve |
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Definition
| the fraction of deposits that banks hold as reserve |
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Definition
| the amount of money the banking system generates with each dollar of reserves |
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| the resources bank owner have put into the institution |
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| the use of borrowed money to supplement existing funds for investment purpose |
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| a government regulation specifying a minimum amount of bank capital |
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| the interest rate on the loans that the fed makes to banks |
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