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Document
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... Explain briefly. (6 points) Money market equilibrium implies that Ms/P=L(i,Y). If the right hand side increases (due to part (d)), then Price level has to decline to achieve money market equilibrium. ...
the front view - Allied Affiliated Funding
the front view - Allied Affiliated Funding

AD curve - MIT OpenCourseWare
AD curve - MIT OpenCourseWare

Examination Aids allowed
Examination Aids allowed

... national income is at the full employment level: the AD, SAS and LAS curves intersect all at one point. Now suppose that there occurs a negative supply shock such as ‘oil shocks’. What will happen to the price level and the national income of the economy in the short-run as well as in the long-run? ...
Money as gold versus money as water
Money as gold versus money as water

File - "Education is the most powerful weapon which you
File - "Education is the most powerful weapon which you

... 32. How do you determine if a rational economic decision has been made? 33. What fiscal policy tools could be used to expand the economy? 34. List three things microeconomics examines and three things macroeconomics would examine. 35. How are public goods and services in the U.S. paid for? 36. What ...
Midterm Exam No. 2 - Answers April 1, 2004
Midterm Exam No. 2 - Answers April 1, 2004

Parkin_Macro_9e_clicker_ch08
Parkin_Macro_9e_clicker_ch08

... functioning as a store of value? A. Comcast charging $99 for internet, phone and cable service. B. McDonalds charging 99 cents for a burger. C. Your saving your spare change in a jar in order to afford an end -of-term party. D. Amazon.com charging $9.95 for shipping. ...
chapter 12 questions
chapter 12 questions

... d. will cause the government to go bankrupt Currently, the Social Security trust fund is running a a. deficit, which reduces the apparent size of the budget deficit. b. surplus, which reduces the apparent size of the budget deficit. c. surplus, which increases the apparent size of the budget deficit ...
MPC Press Release
MPC Press Release

... 10. Notwithstanding the unanticipated adjustment in petroleum prices and its possible pass through effects, our inflation forecast horizon remains broadly unchanged for the delivery of the medium term target of 8±2 percent in early 2017, barring any further unanticipated shocks. The Committee there ...
Chapter 15
Chapter 15

... Stabilizers are changes in fiscal policy that stimulate aggregate demand when the economy goes into a recession without policy-makers having to take any deliberate action. Automatic stabilizers include: The Tax System: Y↓ >>T ↓ – Government Spending---EI especially – Flexible X rate. ...
Three Items for the Macroeconomic Agenda
Three Items for the Macroeconomic Agenda

Document
Document

... make 5 year loans and have short term deposits, then the value of their assets and liabilities do not move together as interest rates move. 7. Briefly discuss the moral hazard problem of lending. A borrower is tempted to use borrowed funds in a more speculative venture than the lender agreed to fund ...
Civics Review powerpoint
Civics Review powerpoint

... Consumer goods – bought by consumers for final use Business (Capital) goods – bought to be used by a business to produce other goods Government goods – anything bought by the federal, state and local governments ...
Interest Rate
Interest Rate

... Figure 6 An Increase in the Money Supply At point E, the money market is in equilibrium at an interest rate of 6 percent. ...
File
File

... against which the performance of fiscal policy can be judged. The fiscal rules are: • the golden rule: over the economic cycle, the Government will borrow only to invest and not to fund current spending; and • the sustainable investment rule: public sector net debt as a proportion of GDP will be hel ...
Principles of Macroeconomics (Spring 2017) Masao Suzuki CRN
Principles of Macroeconomics (Spring 2017) Masao Suzuki CRN

... and Keynesian Economics Review for Midterm #3, Banks and the Business Cycle, and Monetary Policy ...
Defining Aggregate Demand and Aggregate Supply
Defining Aggregate Demand and Aggregate Supply

Lecture 18
Lecture 18

... r = interest rate Yd=disposable income C = 600 + 0.75Yd; Id = 2000 – 1500r ; G=100; T=100; EX=0; IM=0 Money demand: MD = 900 – 1000r; The required reserve ratio for all banks in this economy is rrr=10%. No bank holds excess reserves, and everybody keeps all their money in the banking system (so no c ...
AP Macro Course Outline - Elizabethtown Area School District
AP Macro Course Outline - Elizabethtown Area School District

... and practice in the domestic and international market place. As our world becomes more interconnected through technological advances, an awareness of basic economic theory becomes imperative for the active citizen. Consumers and producers, as well as national economies, rely on economic information ...
3 - Studyit
3 - Studyit

... M3 (Broad Money supply) includes M2 plus term deposits or investment accounts held by the public at registered banks and other M3 institutions (for example buildings societies (e.g. Southern Cross Building Society) and savings institutions (e.g. PSIS)). This includes all other types of accounts used ...
Answers to Questions in Economics for Business
Answers to Questions in Economics for Business

... Capital mobility could help to reduce the problem. As the text argues, capital might be attracted to areas where labour costs are low: i.e. the depressed regions. On the other hand, with the demand for capital likely to be high in the more prosperous regions, capital is likely to be attracted to the ...
g - University of Ottawa
g - University of Ottawa

... rate of accumulation now depends on transitional dynamics, which cannot be ignored: short-run events have a qualitative impact on long-run equilibria. It is common to speak of ‘path-dependence’ for such a characteristic. It is possible to show that this kind of model displays hysteresis in the sense ...
AP Macro Study Guide - Phoenix Union High School District
AP Macro Study Guide - Phoenix Union High School District

Principles of Economics, Case and Fair,9e
Principles of Economics, Case and Fair,9e

... Velocity has not been constant over the period from 1960 to 2007. There is a long-term trend—velocity has been rising. There are also fluctuations, some of them quite large. ...
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Money supply

In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. There are several ways to define ""money,"" but standard measures usually include currency in circulation and demand deposits (depositors' easily accessed assets on the books of financial institutions).Money supply data are recorded and published, usually by the government or the central bank of the country. Public and private sector analysts have long monitored changes in money supply because of its effects on the price level, inflation, the exchange rate and the business cycle.That relation between money and prices is historically associated with the quantity theory of money. There is strong empirical evidence of a direct relation between money-supply growth and long-term price inflation, at least for rapid increases in the amount of money in the economy. For example, a country such as Zimbabwe which saw extremely rapid increases in its money supply also saw extremely rapid increases in prices (hyperinflation). This is one reason for the reliance on monetary policy as a means of controlling inflation.The nature of this causal chain is the subject of contention. Some heterodox economists argue that the money supply is endogenous (determined by the workings of the economy, not by the central bank) and that the sources of inflation must be found in the distributional structure of the economy.In addition, those economists seeing the central bank's control over the money supply as feeble say that there are two weak links between the growth of the money supply and the inflation rate. First, in the aftermath of a recession, when many resources are underutilized, an increase in the money supply can cause a sustained increase in real production instead of inflation. Second, if the velocity of money (i.e., the ratio between nominal GDP and money supply) changes, an increase in the money supply could have either no effect, an exaggerated effect, or an unpredictable effect on the growth of nominal GDP.
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