Economics 1022A/B Study Guide - Midterm Guide: Canada Deposit Insurance Corporation, Open Market Operation, Credit Union

• School: Western University
• Department: Economics
• Course: Economics 1022A/B
• Professor: Sunghoon Cho

Document Summary

Econ 1022a: but also take risks to reduce risk of failure, the(cid:455) a(cid:396)e (cid:396)e(cid:395)ui(cid:396)ed to hold le(cid:448)els of (cid:396)ese(cid:396)(cid:448)es a(cid:374)d o(cid:449)(cid:374)e(cid:396)s" (cid:272)apital e(cid:395)ual to o(cid:396) that su(cid:396)pass the ratios laid down by regulation. La(cid:396)gest a(cid:374)d (cid:373)ost i(cid:373)po(cid:396)ta(cid:374)t asset is ca(cid:374)adia(cid:374) go(cid:448)"t se(cid:272)u(cid:396)ities: liabilities ba(cid:374)k of ca(cid:374)ada (cid:374)otes a(cid:374)d deposits of (cid:271)a(cid:374)ks a(cid:374)d go(cid:448)"t. In the long run, gm + 0 = inflation rate, + gy. In the long run, money velocity does not change. Inflation = gm gy: gy = gm - inflation, difference between long run and short run model how fast prices adjust, short-run price is fixed; too fast for prices to adjust. In the short run, p and v are fixed, so any change in m will affect y: this means that monetary policies (increase or decrease of y) have effects on the real economy in the short-run. The invention of credit cards, apple pay, etc.