Mankiw8e_Student_PPTs_Chapter 14 - E-SGH
... The two terms in this equation are explained as follows: 1) When firms expect a high price level, they expect high costs. Those firms that fix prices in advance set their prices high. These high prices cause the other firms to set high prices also. Hence, a high expected price level E leads to a hig ...
... The two terms in this equation are explained as follows: 1) When firms expect a high price level, they expect high costs. Those firms that fix prices in advance set their prices high. These high prices cause the other firms to set high prices also. Hence, a high expected price level E leads to a hig ...
File
... • Should the price reach this level, the associated quantities would be demanded: people would be Able and Willing to buy it. • Clearly, as the price declines, consumers are able and willing to buy more soda. ...
... • Should the price reach this level, the associated quantities would be demanded: people would be Able and Willing to buy it. • Clearly, as the price declines, consumers are able and willing to buy more soda. ...
What is consumer surplus, and how is it measured
... Other things equal, what happens to producer surplus when the price of a good rises? Illustrate your answer on a supply curve. ANSWER: ...
... Other things equal, what happens to producer surplus when the price of a good rises? Illustrate your answer on a supply curve. ANSWER: ...
Risk Premiums in Slovak Government Bonds
... Overnight-Indexed Swap (OIS) is an interest rate swap whose floating rate leg is tied to the overnight rate, i.e. EONIA in the Eurozone. Unlike the swaps linked to the Libor rate, OIS do not reflect the credit risk of the banking system. Similar to conventional swaps, there is no exchange of the pri ...
... Overnight-Indexed Swap (OIS) is an interest rate swap whose floating rate leg is tied to the overnight rate, i.e. EONIA in the Eurozone. Unlike the swaps linked to the Libor rate, OIS do not reflect the credit risk of the banking system. Similar to conventional swaps, there is no exchange of the pri ...
Chapter 11 - Pearland ISD
... The Quantity of Goods and Services Demanded At Any Given Price Level, Shifting Aggregate-Demand To The Right. • When The Fed Decreases The Money Supply, It Raises The Interest Rate and Reduces The Quantity of Goods and Services Demanded At Any Given Price Level, Shifting Aggregate-Demand To The ...
... The Quantity of Goods and Services Demanded At Any Given Price Level, Shifting Aggregate-Demand To The Right. • When The Fed Decreases The Money Supply, It Raises The Interest Rate and Reduces The Quantity of Goods and Services Demanded At Any Given Price Level, Shifting Aggregate-Demand To The ...
Chapter10 Externalities
... firms does not matter from the standpoint of economic efficiency. – Those firms that can reduce pollution most easily would be willing to sell whatever permits they get, and those firms that can reduce pollution only at high cost would be willing to buy whatever permits they need. – As long as there ...
... firms does not matter from the standpoint of economic efficiency. – Those firms that can reduce pollution most easily would be willing to sell whatever permits they get, and those firms that can reduce pollution only at high cost would be willing to buy whatever permits they need. – As long as there ...
Welfare and Efficiency
... – Helps measure producer surplus – Viewed as willingness to accept (price they would take) – Viewed as cost of production ...
... – Helps measure producer surplus – Viewed as willingness to accept (price they would take) – Viewed as cost of production ...
PDF
... second method of calculating FCIC yield guarantees and premiums in 1982. Operators could submit proof of yields in the five years prior to 1982 to establish an average yield for their farm. Operators could select yield guarantees of 50%, 65%, or 75% of their average yields. Premiums were calculated ...
... second method of calculating FCIC yield guarantees and premiums in 1982. Operators could submit proof of yields in the five years prior to 1982 to establish an average yield for their farm. Operators could select yield guarantees of 50%, 65%, or 75% of their average yields. Premiums were calculated ...
Lecture 01.5
... • Consumer will buy a good as long as: – Total Willingness-to-Pay > Amount Paid • There is always some consumer surplus, or incentive for consumer • Consumer Surplus ≡ Difference () between maximum amount that you are willing-to-pay and what you have to pay – CS ≡ Total WTP – Average Price x Qty Pu ...
... • Consumer will buy a good as long as: – Total Willingness-to-Pay > Amount Paid • There is always some consumer surplus, or incentive for consumer • Consumer Surplus ≡ Difference () between maximum amount that you are willing-to-pay and what you have to pay – CS ≡ Total WTP – Average Price x Qty Pu ...
Money market instruments
... period. The quoted rate itself is therefore not enough if we want to compare the actual yields of these instruments. For this we use indicators called effective yield and simple return. 2.1 Effective yield expresses the yield of a given money market instrument as an annualized interest rate based on ...
... period. The quoted rate itself is therefore not enough if we want to compare the actual yields of these instruments. For this we use indicators called effective yield and simple return. 2.1 Effective yield expresses the yield of a given money market instrument as an annualized interest rate based on ...
The Myth of Expansionary Austerity
... expansionary austerity hypothesis is obvious. However, the assumptions that guarantee the Ricardian behaviour of the representative individual, that is those of no liquidity constraints and lack of uncertainty, are rarely met in the real world. The effects of liquidity constraints and uncertainty on ...
... expansionary austerity hypothesis is obvious. However, the assumptions that guarantee the Ricardian behaviour of the representative individual, that is those of no liquidity constraints and lack of uncertainty, are rarely met in the real world. The effects of liquidity constraints and uncertainty on ...
The Equity Risk Premium
... They don’t want to lose money, so their returns should at least protect them against inflation so there is no loss in purchasing power. Hence, the return to cash should at least equal the inflation rate. The return to a safe, long-term investment should equal the rate of growth in the economy. Inves ...
... They don’t want to lose money, so their returns should at least protect them against inflation so there is no loss in purchasing power. Hence, the return to cash should at least equal the inflation rate. The return to a safe, long-term investment should equal the rate of growth in the economy. Inves ...
“Risk-Free” Liabilities: Efficient Pension Management Requires The
... plished this by masking risk with smoothing mechanisms (e.g., asset smoothing, amortization of gains and losses and plan amendments over periods ranging from five to 30 years, etc.). In the new pension paradigm, economic risk related to pensions is relatively transparent due to the migration toward ...
... plished this by masking risk with smoothing mechanisms (e.g., asset smoothing, amortization of gains and losses and plan amendments over periods ranging from five to 30 years, etc.). In the new pension paradigm, economic risk related to pensions is relatively transparent due to the migration toward ...
Slide 1
... the Greenbook that staff continue to believe that additional pressure in financial markets would be required to slow the expansion… Do you think you’ve seen the full impact of the tightening moves that we’ve had to date?” Prell: “No, but our thought is that even after we have absorbed those, that we ...
... the Greenbook that staff continue to believe that additional pressure in financial markets would be required to slow the expansion… Do you think you’ve seen the full impact of the tightening moves that we’ve had to date?” Prell: “No, but our thought is that even after we have absorbed those, that we ...
non-rated municipal bonds—understanding the risks
... CHARACTERISTICS OF NON-RATED BONDS Absence of a Rating Municipalities generally issue bonds that are rated by a bond rating agency in an effort to reduce their borrowing costs. Strong credit ratings mean investors are taking less risk, so they receive a lower rate of interest on their bonds. Lower c ...
... CHARACTERISTICS OF NON-RATED BONDS Absence of a Rating Municipalities generally issue bonds that are rated by a bond rating agency in an effort to reduce their borrowing costs. Strong credit ratings mean investors are taking less risk, so they receive a lower rate of interest on their bonds. Lower c ...
The Marginal Use Value
... In other words, it is similar to the case of a substitution effect in the ordinal approach, although they are based on very different approaches. * If the MUV curve involves marginal valuation and no change in real income, then it is comparable to the real-income-constant demand curve derived from t ...
... In other words, it is similar to the case of a substitution effect in the ordinal approach, although they are based on very different approaches. * If the MUV curve involves marginal valuation and no change in real income, then it is comparable to the real-income-constant demand curve derived from t ...
Topic_05_Determination_of_Interest_Rate
... supply perspective. Keep in mind that these forces act differently in different bond markets. That is, current supply/demand conditions in the corporate bond market are not necessarily the same as, say, in the mortgage market. However, because rates tend to move together, we will proceed as if there ...
... supply perspective. Keep in mind that these forces act differently in different bond markets. That is, current supply/demand conditions in the corporate bond market are not necessarily the same as, say, in the mortgage market. However, because rates tend to move together, we will proceed as if there ...
Yield curve
In finance, the yield curve is a curve showing several yields or interest rates across different contract lengths (2 month, 2 year, 20 year, etc...) for a similar debt contract. The curve shows the relation between the (level of) interest rate (or cost of borrowing) and the time to maturity, known as the ""term"", of the debt for a given borrower in a given currency. For example, the U.S. dollar interest rates paid on U.S. Treasury securities for various maturities are closely watched by many traders, and are commonly plotted on a graph such as the one on the right which is informally called ""the yield curve"". More formal mathematical descriptions of this relation are often called the term structure of interest rates.The shape of the yield curve indicates the cumulative priorities of all lenders relative to a particular borrower, (such as the US Treasury or the Treasury of Japan) or the priorities of a single lender relative to all possible borrowers. With other factors held equal, lenders will prefer to have funds at their disposal, rather than at the disposal of a third party. The interest rate is the ""price"" paid to convince them to lend. As the term of the loan increases, lenders demand an increase in the interest received. In addition, lenders may be concerned about future circumstances, e.g. a potential default (or rising rates of inflation), so they offer higher interest rates on long-term loans than they offer on shorter-term loans to compensate for the increased risk. Occasionally, when lenders are seeking long-term debt contracts more aggressively than short-term debt contracts, the yield curve ""inverts"", with interest rates (yields) being lower for the longer periods of repayment so that lenders can attract long-term borrowing.The yield of a debt instrument is the overall rate of return available on the investment. In general the percentage per year that can be earned is dependent on the length of time that the money is invested. For example, a bank may offer a ""savings rate"" higher than the normal checking account rate if the customer is prepared to leave money untouched for five years. Investing for a period of time t gives a yield Y(t).This function Y is called the yield curve, and it is often, but not always, an increasing function of t. Yield curves are used by fixed income analysts, who analyze bonds and related securities, to understand conditions in financial markets and to seek trading opportunities. Economists use the curves to understand economic conditions.The yield curve function Y is actually only known with certainty for a few specific maturity dates, while the other maturities are calculated by interpolation (see Construction of the full yield curve from market data below).