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College of Business and Economics
College of Business and Economics

... In NC world, permanent changes in GNP growth cannot occur from monetary shocks since money is neutral; therefore main forces causing instability must be real shocks. If shocks to productivity growth are frequent and random, path of Y follows a random walk that resembles the business cycle. No distin ...
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... government securities market, and estimates the demand for reserves and how the prices of government securities will change during the trading day. 9:10 A.M. The account manager studies the FOMC’s directive, or the level of the federal funds rate desired, and designs dynamic open market operations a ...
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... 2. Habit formation refers to the assumption that consumers care not only about their level of consumption but about the change in consumption from one period to the next. 3. The current version of this model does not account for a financial accelerator that may also exist in the business sector and ...
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... around 1925 and, in 1926, the National Broadcasting Company (NBC) made plans for radios to be in 26 million American homes. Families gathered in the evening to listen to music, comedies and dramas. The radio not only supplied the major source of entertainment, but also connected people with the worl ...
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... example is only to show what role can be played by changing proportions of factors of production when disequilibrium is transferred from macro to micro level. In this context it is worth noticing that savings levels (determined with respect to micro-optimization) would always be consistent with mac ...
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Business cycle review, 1998-2011 Willy Chetwin

... The OCR was cut by one percentage point in late 2001 after the terrorist attacks in the US. The policy rate was lowered by 75 basis points (bps) in response to the economic threat posed by SARS and, to some degree, rising oil prices. ...
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Advanced Placement Macroeconomics Study Notes

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... 45. Suppose that the Fed decides to decrease the growth rate of the money supply in the U.S. What is most likely to happen to the U.S. trade deficit, and to GDP? A. The trade deficit will rise, GDP will rise. B. The trade deficit will fall, GDP will rise. C. The trade deficit will rise, GDP will fal ...
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... existence of important conceptual and technical difficulties in the formulation and successful implementation of policy on the basis of monetary aggregate targets in a world of uncertainty regarding the stability of economic behavioral relationships and in th6 presence of innovations in the financia ...
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... problem here is the small size of the sample. A concurrent index of economic activity is published by the Bank monthly, as is a related private sector-published index. The Bank regards the indicator series as informative. There are also other sources of monthly information, including credit card pur ...
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... The goal of this short paper is to use an explicit optimization in order to derive the consumption function and the IS relationship with a wealth effect. This derivation is then used as a possible explanation of the puzzle of interest rate smoothing. Another natural application is a simplification o ...
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... money, monetary, currency appear in the title of all Keynes’s major books on economic theory. His conceptualization of money, however, differs significantly from that of classical economic theory, while the latter has dominated mainstream economists’ thought from the eighteenth century to today. The ...
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... 1. shifting AS to the right a. tax cuts b. less regulation 2. mainstream skepticism VII. Money, the Fed and Monetary Policy A. money 1. M1, M2, M3 2. stabilizing 3. demand for money B. The Federal Reserve 1. Board of Governors 2. FOM C 3. 12 federal reserve banks 4. fed functions C. money multiplier ...
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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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