ECN2801

Fall 2017 Review for Exam 3

Dr. Dao

· Fiscal Policy

· Marginal tax rate

· Laffer Curve

· Interest Rate Effect

· Lags in Fiscal Policy

· Supply side economics

· Crowding Out

· Expansionary Fiscal Policy

· Transmission Lag

· Effect of permanent marginal tax decrease on short-run aggregate supply (SRAS)

· Effect of permanent marginal tax decrease on long-run aggregate supply (LRAS)

· Complete Crowding Out

· Excess Reserves

· Bank’s Balance Sheet: Assets and Liabilities

· Barter Economy

· Store of Value function of money

· Measures of Money Supply

· Definition of Money

· Medium of Exchange

· Origin of fractional reserve banking

· Definition of fractional reserve banking

· Tools of Monetary Policy

· Makeup of the Federal Open Market Committee (FOMC)

· Effect of a Fed purchase of government securities on reserves and the money supply

· Federal Funds Market

· Discount Rate

· What is meant by “lender of last resort”?

· Locations of Federal Reserve Banks

· Effect of Decrease in required reserve ratio

· Term of governors of Federal Reserve System

· Number of governors in the Board of Governors of the Fed

· Number of members of the FOMC

· Which Federal Reserve District Bank holds a permanent seat on the FOMC?

· Effect of Lowering Discount Rate on reserves and the money supply

· Formula for simple deposit multiplier