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LEGAL RESERVES: The total amount of vault cash or Federal Reserve deposits of a bank. These are the only bank assets that can be used legally to satisfy reserve requirements.

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INFLATION CAUSES

Inflation, the persistent increase in the average price level, can be caused by an increase in aggregate demand or a decrease in aggregate supply. This suggests two basics sources, causes, or types of inflation--demand-pull inflation and cost-push inflation. While short-term bouts of inflation (up to several months) can result from anything (determinant) that might cause either increases in aggregate demand or decreases in aggregate supply, long-term inflation (a year or more) is possible ONLY through persistent increases in the money supply. As such, while demand-pull inflation and cost-push inflation are convenient ways to catalog the transmission mechanisms of inflation, the ultimate CAUSE of inflation is money.

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[What's This?]

Today, you are likely to spend a great deal of time searching for a specialty store hoping to buy either a video game player or an AC adapter that won't fry your computer. Be on the lookout for strangers with large satchels of used undergarments.
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A thousand years before metal coins were developed, clay tablet "checks" were used as money by the Babylonians.
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APR
Annual Percentage Rate
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