A bank account balance is an ever-changing number. Paychecks, interest payments, and birthday cash are going in from time to time. Meanwhile, ATM withdrawals and charges on your debit card are constantly going out.
To add to the chaos, some of those transactions (the various deposits and withdrawals) take time to post. You may deposit your paycheck on Monday, but the funds don’t clear until Tuesday. Meanwhile, the payment for your cell phone bill that you set up through online bill pay is set to go on the 25th of every month. But it always takes a couple days before the payment goes through.
Thus, you end up with two bank balances: a ledger balance and an available balance.
The ledger balance represents the amount of money currently in your account, ignoring any pending transactions that haven’t cleared yet. The available balance takes these pending transactions into account. It represents what your ledger balance will look like once everything settles up.
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Econ: What is the Real Balance Effect?0 Views
And finance Allah shmoop What is the rial balance effect
Riding a unit cycle on a tightrope walking home from
a raucous New Year's Eve party Examples of one kind
of real balance of that Yeah well another kind relates
to economic decisions Well the real battle Its effect has
to do with the purchasing power of money It posits
that a change in price levels alters how much stuff
you can buy that is assuming your income remains the
same while you make four grand a month Take out
taxes and rent and utilities and insurance and all the
other basic stuff that eats away at your disposable income
Now you have fifteen hundred dollars left in cash to
you know spend on stuff each month but you still
have to eat You know because of a rare gastro
intestinal disorder you have to eat special snails with every
meal There's a certain enzyme that your body can't produce
That only comes from this particular natural snail meat Yes
eat them or die So snail smoothies for breakfast Snail
sandwiches for lunch Snail ala King for dinner and for
a late night snack Deep fried snail poppers Well the
snails you need are usually eight bucks a pound In
a typical month you spend about four hundred dollars on
them which leaves you eleven hundred dollars out of your
budget for you know stuff money Teo You know go
to the movies or buy video games or purchase gold
grills for your teeth Like Ryan locked Yeah whatever else
you need but this month you get bad news There's
been an outbreak of rare snail Ebola that has ravaged
the population of the special snails You need thio survive
Well the number of snails available has plummeted in response
prices double right Demand is the same and supply is
down so prices go up What used to cost eight
bucks a pound now cost sixteen bucks a pound And
instead of four hundred dollars well this month your snail
fix will cost you eight hundred It cuts into your
other spending You usedto have eleven hundred dollars for everything
else Now you've got just seven hundred You'll have to
cut back on your non snail expenditures Yeah Sorry Real
balance effect at work here people Basically if prices go
up and income remains the same consumption expenditures after decline
You just can't buy as much with the money you
have All right well you'll have to economize this month
on ly streaming movies replay old video games brass grills
for the time being for your teeth there At least
until they ramp up those experimental snail farms You know
where Find a cure for snail Ebola Let's just hope 00:02:23.7 --> [endTime] it stays with the snails eh
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