Economics for Educators, Revised
... money supply, M1—cash and demand deposits? If the Fed attempts to keep interest rates low by increasing bank’s excess reserves and expanding the money supply, short-term interest rates will fall. But over time, interest rates and prices could rise if there is more money than the economy needs to pur ...
... money supply, M1—cash and demand deposits? If the Fed attempts to keep interest rates low by increasing bank’s excess reserves and expanding the money supply, short-term interest rates will fall. But over time, interest rates and prices could rise if there is more money than the economy needs to pur ...
THE CENTRAL BANK AND INFLATION
... perpetual, high levels of inflation. It is impossible for the supply of or demand for a widely used input like labor or oil to change so much and continuously as to cause the price of the input to rise at such perpetual, very high levels to cause sustained, rapid inflation. Also, government purchase ...
... perpetual, high levels of inflation. It is impossible for the supply of or demand for a widely used input like labor or oil to change so much and continuously as to cause the price of the input to rise at such perpetual, very high levels to cause sustained, rapid inflation. Also, government purchase ...
Monetary policy
... Limits on Monetary Restraint It is also harder for the Fed to restrain demand Expectations - Optimistic consumers and investors may continue borrowing even though interest rates are higher Global money - U.S. borrowers might tap global sources of money or local non-bank lenders not regulated ...
... Limits on Monetary Restraint It is also harder for the Fed to restrain demand Expectations - Optimistic consumers and investors may continue borrowing even though interest rates are higher Global money - U.S. borrowers might tap global sources of money or local non-bank lenders not regulated ...
How to conduct monetary policy
... the exports we sell abroad and raises the prices we pay for foreign-produced goods. The increase in aggregate demand for the economy's output through these various channels leads firms to raise production and employment, which in turn increases business spending on capital goods even further by maki ...
... the exports we sell abroad and raises the prices we pay for foreign-produced goods. The increase in aggregate demand for the economy's output through these various channels leads firms to raise production and employment, which in turn increases business spending on capital goods even further by maki ...
Money as gold versus money as water
... high degree of internal inspection, since fiat money on a computer is fairly easy to cheat with. The latter is no different than from current banks, albeit that a private bank looks after its own money and civil servants look after public money. The costs of the payment system can be covered by a ti ...
... high degree of internal inspection, since fiat money on a computer is fairly easy to cheat with. The latter is no different than from current banks, albeit that a private bank looks after its own money and civil servants look after public money. The costs of the payment system can be covered by a ti ...
Solutions
... actions often take 1–3 years before they have their full effect on the economy.) Your answer may differ, but the slow recovery with low inflation makes conditions conducing to expansionary policy. b. If expansion is appropriate, which is the more promising policy lever to use under today’s condition ...
... actions often take 1–3 years before they have their full effect on the economy.) Your answer may differ, but the slow recovery with low inflation makes conditions conducing to expansionary policy. b. If expansion is appropriate, which is the more promising policy lever to use under today’s condition ...
AP Macro Syllabus
... Gross Domestic Product, the components of GDP (C+I+G+NX), real vs. nominal GDP, Consumer Price Index (how it’s calculated, problems with measuring CPI, GDP deflator vs. CPI, real and nominal interest rates, other price indices) ...
... Gross Domestic Product, the components of GDP (C+I+G+NX), real vs. nominal GDP, Consumer Price Index (how it’s calculated, problems with measuring CPI, GDP deflator vs. CPI, real and nominal interest rates, other price indices) ...
DOC
... 6. Refer to the figure above. Other things equal, if real GDP is equal to $900 billion, then a) the money demand curve will be to the right of the one illustrated in the figure above. b) the investment demand curve will be to the left of the one illustrated in the figure above. c) the quantity of mo ...
... 6. Refer to the figure above. Other things equal, if real GDP is equal to $900 billion, then a) the money demand curve will be to the right of the one illustrated in the figure above. b) the investment demand curve will be to the left of the one illustrated in the figure above. c) the quantity of mo ...
The Monetary System The Meaning of Money Money
... ○ If the FOMC decides to increase the money supply, the Fed creates dollars and uses them to buy government bonds form the public in the nation’s bond markets, ● The FOMC’s decisions have an important influence on the economy’s inflation rates in the long run, and the economy’s employment and produ ...
... ○ If the FOMC decides to increase the money supply, the Fed creates dollars and uses them to buy government bonds form the public in the nation’s bond markets, ● The FOMC’s decisions have an important influence on the economy’s inflation rates in the long run, and the economy’s employment and produ ...
Macroeconomics Topic 7
... People try to avoid keeping money in their pockets when inflation is high. One can, for example, keep most of your assets in interest earning accounts by making tiny withdrawals of cash for each purchase that is made. This requires many trips to the bank (presumably wearing out your shoes). These ex ...
... People try to avoid keeping money in their pockets when inflation is high. One can, for example, keep most of your assets in interest earning accounts by making tiny withdrawals of cash for each purchase that is made. This requires many trips to the bank (presumably wearing out your shoes). These ex ...
What Should a Central Bank (Not) Do?
... employment,” explains Krugman (2011). “That’s it.” This is an astonishing definition, as it implies that there is no possible reason for less than full employment when the central bank’s policy rate is zero other than that the government is not spending enough. If the government were to, say, triple ...
... employment,” explains Krugman (2011). “That’s it.” This is an astonishing definition, as it implies that there is no possible reason for less than full employment when the central bank’s policy rate is zero other than that the government is not spending enough. If the government were to, say, triple ...
multiple choice
... a. collect checks through the Federal Reserve System. b. make loans to the public. c. accept repayment of outstanding loans ...
... a. collect checks through the Federal Reserve System. b. make loans to the public. c. accept repayment of outstanding loans ...
Economic Systems 1. MARKET ECONOMY 2. PLANNED ECONOMY
... - reserve ratio - determined by the central bank. It is the percentage of total deposits of a bank that has to be kept in the form of cash. If the central bank alters the value of the reserve ratio, it will actually influence the size of money supply. The higher the reserve ratio, the lower the size ...
... - reserve ratio - determined by the central bank. It is the percentage of total deposits of a bank that has to be kept in the form of cash. If the central bank alters the value of the reserve ratio, it will actually influence the size of money supply. The higher the reserve ratio, the lower the size ...
CHAPTER 15: FISCAL POLICY Section 1: Understanding Fiscal
... What is the main premise of classical economics? What major event challenged this economic “school of thought”? 2. *Explain the deadlock that was occurring between producers and consumers in a depressed economy. 3. Who was John Maynard Keynes? 4. What is demand-side economics? How is it different fr ...
... What is the main premise of classical economics? What major event challenged this economic “school of thought”? 2. *Explain the deadlock that was occurring between producers and consumers in a depressed economy. 3. Who was John Maynard Keynes? 4. What is demand-side economics? How is it different fr ...
Some Good Achievements
... • One of the largest markets in the region with a lot of development potential and unique geographical location making it the natural center of the region • Many markets and market niches not occupied or saturated, giving advantages to early movers • Existing markets can be easily developed and soph ...
... • One of the largest markets in the region with a lot of development potential and unique geographical location making it the natural center of the region • Many markets and market niches not occupied or saturated, giving advantages to early movers • Existing markets can be easily developed and soph ...
Fiscal policy is carried out primarily by:
... 13. In which of the following situations is it certain that the quantity of money demanded by the public will decrease? A) nominal GDP decreases and the interest rate decreases B) nominal GDP increases and the interest rate decreases C) nominal GDP decreases and the interest rate increases D) nomina ...
... 13. In which of the following situations is it certain that the quantity of money demanded by the public will decrease? A) nominal GDP decreases and the interest rate decreases B) nominal GDP increases and the interest rate decreases C) nominal GDP decreases and the interest rate increases D) nomina ...
An Introduction to Monetary Policy Rules
... As policymakers seek to prevent another financial crisis, they are scrutinizing the role the Federal Reserve (Fed) played before and during the 2008 crisis. The Fed currently exercises a great deal of discretion in monetary policy. A key point of debate is whether requiring the Fed to follow a speci ...
... As policymakers seek to prevent another financial crisis, they are scrutinizing the role the Federal Reserve (Fed) played before and during the 2008 crisis. The Fed currently exercises a great deal of discretion in monetary policy. A key point of debate is whether requiring the Fed to follow a speci ...
illinois economics challenge - UIC Center for Economic Education
... C. spend money and use credit because they fear that inflation will soon be high. D. spend money and use credit because they are more secure and confident about their economic situation. E. pay-off past debts and avoid new debt. 27. Who is most likely to be harmed by unanticipated inflation? A. peop ...
... C. spend money and use credit because they fear that inflation will soon be high. D. spend money and use credit because they are more secure and confident about their economic situation. E. pay-off past debts and avoid new debt. 27. Who is most likely to be harmed by unanticipated inflation? A. peop ...
Due Date: Thursday, September 8th (at the beginning of class)
... a. What happens to equilibrium income when the society becomes more thrifty, as represented by a decline in a. If society becomes more thrifty – meaning that for any given level fo income people save more and consume less – then the planned-expenditure function shifts ...
... a. What happens to equilibrium income when the society becomes more thrifty, as represented by a decline in a. If society becomes more thrifty – meaning that for any given level fo income people save more and consume less – then the planned-expenditure function shifts ...