ECON 2020 – 200 Spring 2003 Homework #10: Chapter 14
... a. lower prices increase the value of money holdings and consumer spending increases. b. lower prices decrease the value ofmoney holdings and consumer spending decreases. c. lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases. d. lower prices ...
... a. lower prices increase the value of money holdings and consumer spending increases. b. lower prices decrease the value ofmoney holdings and consumer spending decreases. c. lower prices reduce money holdings, increase lending, interest rates fall, and investment spending increases. d. lower prices ...
Aggregate Demand and Aggregate Supply
... 4. Which of the following would not cause a shift in the long-run aggregate supply curve? a. an increase in available labor b. an increase in available capital c. an increase in available technology d. an increase in price expectations e. All of the above shift the long-run aggregate supply curve. 5 ...
... 4. Which of the following would not cause a shift in the long-run aggregate supply curve? a. an increase in available labor b. an increase in available capital c. an increase in available technology d. an increase in price expectations e. All of the above shift the long-run aggregate supply curve. 5 ...
Fiscal Policy
... • They propose a money-growth rule: The Fed should be required to target the growth rate of money such that it equals the growth rate of real GDP, leaving the price level unchanged. ...
... • They propose a money-growth rule: The Fed should be required to target the growth rate of money such that it equals the growth rate of real GDP, leaving the price level unchanged. ...
Principles of Macroeconomics
... WWI. Also, explain why these contributed to the hyperinflation. 2. In the late 1970s, the U.S. was experiencing stagflation. To counter this, Paul Volcker, the former Fed Chairman, pursued restrictive monetary policy in the early 1980s. Using the quantity theory of money, explain why he did this. 3. ...
... WWI. Also, explain why these contributed to the hyperinflation. 2. In the late 1970s, the U.S. was experiencing stagflation. To counter this, Paul Volcker, the former Fed Chairman, pursued restrictive monetary policy in the early 1980s. Using the quantity theory of money, explain why he did this. 3. ...
Great Contraction
... By December the Bank of the United States in New York closed from inability to meet depositors’ demand for cash. The bank was sound, as evidenced by its ability to pay off depositors 92.5 cents on the dollar when it was liquidated during the worst of the Depression. If the Federal Reserve had done i ...
... By December the Bank of the United States in New York closed from inability to meet depositors’ demand for cash. The bank was sound, as evidenced by its ability to pay off depositors 92.5 cents on the dollar when it was liquidated during the worst of the Depression. If the Federal Reserve had done i ...
REAL%THEORY%OF%THE%PRICE%LEVEL% Background%
... interest rates. After seven years of near-zero federal funds rates, once the Federal Reserve senses that inflation may begin to rise above its 2 percent target, the Fed will start to raise rates toward their historic average levels. A higher federal funds rate generally raises all interest rates, in ...
... interest rates. After seven years of near-zero federal funds rates, once the Federal Reserve senses that inflation may begin to rise above its 2 percent target, the Fed will start to raise rates toward their historic average levels. A higher federal funds rate generally raises all interest rates, in ...
The Accelerator theory
... unemployment, and level of utilization of capital goods. If there is spare capacity in the economy and underutilized capital goods, investment may not occur even if GDP increases ...
... unemployment, and level of utilization of capital goods. If there is spare capacity in the economy and underutilized capital goods, investment may not occur even if GDP increases ...
Macro Semester Topics
... CPI, GDP Deflators, Inflation 45. An Index Year is always made equal to _______. Real change of values over time can always be calculated with the formula: Later Year – Earlier Year/Earlier Year. This = the Rate of Change. The Rate x 100 = Inflation %. 46. CPI measures monthly purchases by _______, ...
... CPI, GDP Deflators, Inflation 45. An Index Year is always made equal to _______. Real change of values over time can always be calculated with the formula: Later Year – Earlier Year/Earlier Year. This = the Rate of Change. The Rate x 100 = Inflation %. 46. CPI measures monthly purchases by _______, ...
Week 8 Practice Quiz a Answers
... For each of the question stems below, circle all the true answers (2 point each). Consider all the models developed in class so far. We will focus our analysis on the short run (which means Y can deviate from Y* - in other words, at this time, ignore the supply side of the class - that will change a ...
... For each of the question stems below, circle all the true answers (2 point each). Consider all the models developed in class so far. We will focus our analysis on the short run (which means Y can deviate from Y* - in other words, at this time, ignore the supply side of the class - that will change a ...
Oscillatory dynamics of GDP components
... approached in economics mostly in the first half of the XX-th Century and give a few examples (a synthesis from the net) of the attempts made by reputable scientists to model such behavior. Let’s start with a few relevant quotes: "The general character and agreement in the periodic turn in movements ...
... approached in economics mostly in the first half of the XX-th Century and give a few examples (a synthesis from the net) of the attempts made by reputable scientists to model such behavior. Let’s start with a few relevant quotes: "The general character and agreement in the periodic turn in movements ...
PANEL
... As I listen to this debate, and it seems to have gone on for a long time, I notice that people take various positions. One is that Milton Friedman is completely wrong; another is that Friedman is almost completely wrong. A third is that there is a grain of truth to what Friedman says, but it is not ...
... As I listen to this debate, and it seems to have gone on for a long time, I notice that people take various positions. One is that Milton Friedman is completely wrong; another is that Friedman is almost completely wrong. A third is that there is a grain of truth to what Friedman says, but it is not ...
business cycle - The Good, the Bad and the Economist
... (potential real GDP) is upward sloping and in keeping with empirical evidence which suggests a long run trend of around 1.5 to 3.5% yearly growth. (Yet note that the cycles are highly stylised.) The cycle is discernible as reoccurring expansions and contractions. Economic activity – measured by real ...
... (potential real GDP) is upward sloping and in keeping with empirical evidence which suggests a long run trend of around 1.5 to 3.5% yearly growth. (Yet note that the cycles are highly stylised.) The cycle is discernible as reoccurring expansions and contractions. Economic activity – measured by real ...
Economics 215
... A decline in the price of stocks will reduce the financial value of firms, which is the sum of the market capitalization plus the value of debt. Under the q theory, firms will reduce investment if their financial value is smaller than the price of their capital because this would imply that firms ar ...
... A decline in the price of stocks will reduce the financial value of firms, which is the sum of the market capitalization plus the value of debt. Under the q theory, firms will reduce investment if their financial value is smaller than the price of their capital because this would imply that firms ar ...
25 The impact of interest rates
... Or the business may run an overdraft, this allows the business to use money that it does not have at the time. It is good business practice for a small business to use loans to buy equipment and finance longer-term expansion. Overdrafts should be used to cover short term changes in cashflow and sudd ...
... Or the business may run an overdraft, this allows the business to use money that it does not have at the time. It is good business practice for a small business to use loans to buy equipment and finance longer-term expansion. Overdrafts should be used to cover short term changes in cashflow and sudd ...
Notes on Business Cycles
... wages or prices can’t adjust to equilibrium is called “sticky wages” and “sticky prices” theory. Generating a recession: start with a drop in AD (a drop in C, or I, or G, or NX). Prices and interest rates should drop. But the Keynesian assumption says prices are sticky and won’t fully adjust downwar ...
... wages or prices can’t adjust to equilibrium is called “sticky wages” and “sticky prices” theory. Generating a recession: start with a drop in AD (a drop in C, or I, or G, or NX). Prices and interest rates should drop. But the Keynesian assumption says prices are sticky and won’t fully adjust downwar ...
W P Executive Summary orking
... Real interest rates are often considered as a function of economic growth and the rate of saving, but that relationship is obtained with the assumptions of a closed economy and a fixed savings rate. Research prompted by very high interest rates in the 1980s examined short term (Barro and Sala-i-Mart ...
... Real interest rates are often considered as a function of economic growth and the rate of saving, but that relationship is obtained with the assumptions of a closed economy and a fixed savings rate. Research prompted by very high interest rates in the 1980s examined short term (Barro and Sala-i-Mart ...
7.1 rise in investment demand when saving depends on interest rate
... economy over a period of time. The term "inflation" is also defined as the increases in the money supply (monetary inflation) which causes increases in the price level. Inflation can also be described as a decline in the real value of money i-e a loss of purchasing power in the medium of exchange wh ...
... economy over a period of time. The term "inflation" is also defined as the increases in the money supply (monetary inflation) which causes increases in the price level. Inflation can also be described as a decline in the real value of money i-e a loss of purchasing power in the medium of exchange wh ...
LOS CICLOS EN LA ECONOMÍA Paseando con
... …with conflicts between productive and speculative capital • “The ensemble of innovations of process and products, of management, organisation and intensification of labour have led to an increase in the exploitation of labour and a zigzagging recovery of the profit rate of productive capital, a pr ...
... …with conflicts between productive and speculative capital • “The ensemble of innovations of process and products, of management, organisation and intensification of labour have led to an increase in the exploitation of labour and a zigzagging recovery of the profit rate of productive capital, a pr ...
Part 1
... deposits in bank accounts. (In today’s dollars, this tax was about 25 cents per checks). Use the short-run model of a small open economy (the Mundell-Fleming model) under a floating-exchange-rate system to illustrate graphically the impact of this tax on the economy. Was the check tax a good policy ...
... deposits in bank accounts. (In today’s dollars, this tax was about 25 cents per checks). Use the short-run model of a small open economy (the Mundell-Fleming model) under a floating-exchange-rate system to illustrate graphically the impact of this tax on the economy. Was the check tax a good policy ...
Chapter 10 Slides
... In the money demand relation, MV=PY, the velocity of money (V) is a stable function of a few well defined variables. Based on this simple functional relationship then, steady money supply growth should yield steady nominal output growth. If the money supply growth does not exceed that rate consisten ...
... In the money demand relation, MV=PY, the velocity of money (V) is a stable function of a few well defined variables. Based on this simple functional relationship then, steady money supply growth should yield steady nominal output growth. If the money supply growth does not exceed that rate consisten ...
Principles of Economics, Case and Fair,9e
... output, is called the “strict monetarist” view. Almost all economists agree that sustained inflation is purely a monetary phenomenon. Inflation cannot continue indefinitely without increases in the money supply. ...
... output, is called the “strict monetarist” view. Almost all economists agree that sustained inflation is purely a monetary phenomenon. Inflation cannot continue indefinitely without increases in the money supply. ...
lecture notes
... simultaneously causing cost-push inflation and recession. B. Monetarist View: This label is applied to a modern form of classical economics. 1. Money supply is the focus of monetarist theory. 2. Monetarism argues that the price and wage flexibility provided by competitive markets cause fluctuations ...
... simultaneously causing cost-push inflation and recession. B. Monetarist View: This label is applied to a modern form of classical economics. 1. Money supply is the focus of monetarist theory. 2. Monetarism argues that the price and wage flexibility provided by competitive markets cause fluctuations ...
Policy Analysis with the IS/LM Model
... policy implementation lag: the delay between the time policymakers recognize the need for a policy action and when the policy is actually instituted. U.S. fiscal policy has a large implementation lag because policy must be formulated and legislation passed by Congress and signed by the President. ...
... policy implementation lag: the delay between the time policymakers recognize the need for a policy action and when the policy is actually instituted. U.S. fiscal policy has a large implementation lag because policy must be formulated and legislation passed by Congress and signed by the President. ...