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GRESHAM'S LAW: A principle stating that bad money drives good money out of circulation. For this law to apply an economy clearly needs two types of money, one considered good and the other considered bad. Good and bad money in this context has nothing to do with the propensity to torture small animals or attempts at world domination. Good and bad are based on the official value in exchange versus value in use. Gold and silver, which were both used as money in the U.S. Economy in the 1800s, provides an illustration. Silver took on the role of "bad money" because it was relatively less value in use than gold. As such, people used silver as everyday money and stockpiled, or hoarded, gold. The silver bad money drove the gold good money out of circulation.
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MARGINAL PROPENSITY TO SAVE The proportion of each additional dollar of household income that is used for saving. The marginal propensity to save (abbreviated MPS) is another term for the slope of the saving line and is calculated as the change in saving divided by the change in income. The MPS plays a central role in Keynesian economics. It quantifies the saving-income relation, which is the flip side of the consumption-income relation, and thus it reflects the fundamental psychological law. It is also a critical to the multiplier process. A related saving measure is the average propensity to save.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway seeking to buy either a coffee cup commemorating the first day of spring or a printer that works with your stockpile of ink cartridges. Be on the lookout for infected paper cuts.
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The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
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"The moment you let avoiding failure become your motivator, you're down the path of inactivity. " -- Roberto Goizueta, Coca-Cola CEO
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GNMA
Government National Mortgage Association
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