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AGGREGATE DEMAND DETERMINANT: A ceteris paribus factor that affects aggregate demand, but which is assumed constant when the aggregate demand curve is constructed. Changes in any of the aggregate demand determinants cause the aggregate demand curve to shift. While a wide variety of specific ceteris paribus factors can cause the aggregate demand curve to shift, it's usually most convenient to group them into the four, broad expenditure categories -- consumption, investment, government purchases, and net exports. The reason is that changes in these expenditures are the direct cause of shifts in the aggregate demand curve. If any determinant affects aggregate demand it MUST affect one of these four expenditures.
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REQUIRED RESERVES The reserves (vault cash and Federal Reserve deposits) that banks are required by government to keep to back up deposits. The primary use of required reserves is to process daily checkable deposit transactions. The government regulator in charge of setting reserve requires is the Federal Reserve System. Required reserves are usually in the range of 3 to 10 percent for checkable deposits and substantially less (0 percent) for savings deposits. Any legal reserves held by banks over those required to back deposits, termed excess reserves or free reserves, are available for interest-generating loans.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time going from convenience store to convenience store seeking to buy either a wall poster commemorating the moon landing or storage boxes for your winter clothes. Be on the lookout for malfunctioning pocket calculators.
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This isn't me! What am I?
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Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
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"When your values are clear to you, making decisions becomes easier. " -- Roy Disney, executive
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BHC
Bank Holding Company
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