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Macroeconomics Study Sheet Essay

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Below is an essay on "Macroeconomics Study Sheet" from Anti Essays, your source for research papers, essays, and term paper examples.

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Free Market: Decisions by Private Sector
Deficit (gov spending)spend more than tax revenuesgov must borrowcompete for public’s savings with firmstake away from firms funds that would have been invested government & not private sector makes investment decisions
Self-Adjusting Mechanism
1. Firms stop productionfire worker s= recession.
2. Unemploymentwages drophire more workers b/c they’re cheapermore people workingproduction increases
3. Firmsprices b/c labor costs are lower demand for goods & services   b/c goods are cheaper & more people are now working
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4. Economy enters period of recovery
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Investment Bank: financial institute issues & sells bonds & stocks (where you put money you can risk to get a return)
Commercial Bank: Provides checking account, savings & money market (where you put money you can not risk & forgo the return)
Glass Steagall Act (6.16.1933):
-restore public confidence in banks
-c. banks: accepts deposits, make loans, etc
-i. banks: limited to capital market activities (raising money through issuing & selling bonds & stocks)
-founded FDIC for insuring bank deposits
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Financial Services Modernization (Graham-Leach-Bliley 1999): repealed Glass Steagall Act, allows all banks & firms & insurance companies to join, legalized mergers
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Role of Government: promotes concentration, must keep a balanced budge (spending=tax revenue), no gov policy needed, Laissez Faire
What caused the Great Depression?
1. Falling agricultural prices
(farmers incomecannot repay loans or purchase goodsweakness in farm transfers to citiesunemployment demand for goods)
2. Poor income distribution
3. Stock Market Crash Oct 29 1929
(stock owners “feel poor” <wealth...

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Macroeconomics Study Sheet. Anti Essays. Retrieved December 11, 2018, from the World Wide Web: http://parimatchstavki7.com/free-essays/Macroeconomics-Study-Sheet-507998.html