classical
... S = I + (G - T); the spending is bond financed. If G = T before the increase in spending, if G but T is unchanged, then G – T > 0. The demand for loanable funds increases by (G – T), shifting to the right. r leading to I , S(r) and C(r). ...
... S = I + (G - T); the spending is bond financed. If G = T before the increase in spending, if G but T is unchanged, then G – T > 0. The demand for loanable funds increases by (G – T), shifting to the right. r leading to I , S(r) and C(r). ...
Macro - Unit 4
... Weiss APE/Honors Economics – Test Study Questions – Macro – Unit 4 12. Aggregate demand & aggregate supply analysis suggests that, in the short run, an expansionary monetary policy will result in A. A shift in the aggregate demand curve to the left B. A shift in the aggregate supply curve to the lef ...
... Weiss APE/Honors Economics – Test Study Questions – Macro – Unit 4 12. Aggregate demand & aggregate supply analysis suggests that, in the short run, an expansionary monetary policy will result in A. A shift in the aggregate demand curve to the left B. A shift in the aggregate supply curve to the lef ...
EOCT Study Guide for Economics
... 8. Opportunity cost-value of the next best alternative (the thing you did not choose) 9. Marginal cost- the cost of getting or making one more item. 10. Marginal benefit-the benefit associated with one additional item 11. Marginal benefit=marginal cost; then no more will be made, its not worth it to ...
... 8. Opportunity cost-value of the next best alternative (the thing you did not choose) 9. Marginal cost- the cost of getting or making one more item. 10. Marginal benefit-the benefit associated with one additional item 11. Marginal benefit=marginal cost; then no more will be made, its not worth it to ...
Quiz for Chapters 8-12 - Porterville College Home
... 36. (Exhibit: Fiscal Policy) Assume that the economy is initially at Y1 in Panel (b). A nonintervention policy would result in the restoration of potential output by allowing the _______ to shift _______ . A) short-run aggregate supply; right B) aggregate demand; to the left C) short-run aggregate s ...
... 36. (Exhibit: Fiscal Policy) Assume that the economy is initially at Y1 in Panel (b). A nonintervention policy would result in the restoration of potential output by allowing the _______ to shift _______ . A) short-run aggregate supply; right B) aggregate demand; to the left C) short-run aggregate s ...
Economics 14.02 Problem Set 2 Answers Due Date: 2/25/04
... technically a rising velocity of money, although thinking about credit cards will highlight that the dominant part is played by non-monetary interactions rather than a single dollar bill changing hands more often during a period time. ...
... technically a rising velocity of money, although thinking about credit cards will highlight that the dominant part is played by non-monetary interactions rather than a single dollar bill changing hands more often during a period time. ...
Money Growth and Inflation
... •Inflation causes dollars at different times to have different real values. •Therefore, with rising prices, it is more difficult to compare real revenues, costs, and profits over time. 6. A Special Cost of Unexpected Inflation: Arbitrary Redistribution of Wealth •Unexpected inflation redistributes w ...
... •Inflation causes dollars at different times to have different real values. •Therefore, with rising prices, it is more difficult to compare real revenues, costs, and profits over time. 6. A Special Cost of Unexpected Inflation: Arbitrary Redistribution of Wealth •Unexpected inflation redistributes w ...
Heading for the exit: Is this the end of cheap...
... unemployment is above 6.5%, provided inflation remains under control. At its current pace the unemployment target is unlikely to be reached until early 2015; and inflation in the US remains low and stable. However it does look like the Fed is at the beginning of a path back toward operating normal m ...
... unemployment is above 6.5%, provided inflation remains under control. At its current pace the unemployment target is unlikely to be reached until early 2015; and inflation in the US remains low and stable. However it does look like the Fed is at the beginning of a path back toward operating normal m ...
Mother Banks
... Thailand-like contagion effects from nearby nonEuro countries? What are risks of a domestic bank run? No consideration that post-1999 arrival of mother banks make a domestic bank run less likely – In itself, arrival of mother banks is a vote of confidence in future stability of Croatian financial sy ...
... Thailand-like contagion effects from nearby nonEuro countries? What are risks of a domestic bank run? No consideration that post-1999 arrival of mother banks make a domestic bank run less likely – In itself, arrival of mother banks is a vote of confidence in future stability of Croatian financial sy ...
Optimal Foreign Reserves: The Case of Croatia
... Holding Reserves? Paper treats the avoidance of welfare losses in a future sudden stop as the only reason to hold reserves? n What about short-run stabilization of the exchange rate? Doesn’t every country need reserves for that ...
... Holding Reserves? Paper treats the avoidance of welfare losses in a future sudden stop as the only reason to hold reserves? n What about short-run stabilization of the exchange rate? Doesn’t every country need reserves for that ...
Japan`s Approach to Monetary Policy
... made for the most part by the legal reserve requirements of depository institutions, and for the rest by the working balances of both depository and nondepository institutions.1 The practice of influencing the price of liquidity supplied through open market operations reflects the central role that ...
... made for the most part by the legal reserve requirements of depository institutions, and for the rest by the working balances of both depository and nondepository institutions.1 The practice of influencing the price of liquidity supplied through open market operations reflects the central role that ...
Bank of Canada - McGraw Hill Higher Education
... The cause of the stagflation was the increased price of a vital resource. Causing a drop in aggregate supply and a leftward shift in the AS curve. Prices went up 10% from 80 to 99 and GDP dropped by 5% from 400 to 380. There is now a recessionary gap of $20 (the difference between the new GDP level ...
... The cause of the stagflation was the increased price of a vital resource. Causing a drop in aggregate supply and a leftward shift in the AS curve. Prices went up 10% from 80 to 99 and GDP dropped by 5% from 400 to 380. There is now a recessionary gap of $20 (the difference between the new GDP level ...
Exchange rates under sticky prices: The Dornbusch (1976
... So, the exchange rate moves (jumps) to point (s0 , q0) on the new saddle path. ...
... So, the exchange rate moves (jumps) to point (s0 , q0) on the new saddle path. ...
TOTAL SPENDING = TOTAL INCOME = GDP
... Voters are swayed by politicians who claim that it’s all the free market’s fault, that capitalism is to blame, and so they vote for socialist-inclined politicians who regulate, tax, and spend, increasing the role of government in the economy and reducing the role of the free market. p. 46 ff: As Fri ...
... Voters are swayed by politicians who claim that it’s all the free market’s fault, that capitalism is to blame, and so they vote for socialist-inclined politicians who regulate, tax, and spend, increasing the role of government in the economy and reducing the role of the free market. p. 46 ff: As Fri ...
Lecture 11: Inflation: Its Causes and Costs
... changes in the nominal value of output (PY) are also reflected in changes in the price level, since they do not affect real output (Y). When the Fed increases the money supply rapidly, the result is a higher rate of inflation. ...
... changes in the nominal value of output (PY) are also reflected in changes in the price level, since they do not affect real output (Y). When the Fed increases the money supply rapidly, the result is a higher rate of inflation. ...
Monetary Policy / The Fed / Banking
... control inflation, and stimulate economic growth. “Discretionary” means the changes are at the option of the Federal government. Discretionary fiscal policy changes are often initiated by the President, on the advice of the Council of Economic Advisers (CEA). Changes not directly resulting from cong ...
... control inflation, and stimulate economic growth. “Discretionary” means the changes are at the option of the Federal government. Discretionary fiscal policy changes are often initiated by the President, on the advice of the Council of Economic Advisers (CEA). Changes not directly resulting from cong ...
SOLUTION EXAM 06/07/04
... money (M) to the nominal value of output (P x Y). According to this theory inflation is exclusively caused by the growth of money supply. The assumptions needed to fulfill that statement are: 1. The velocity of money is relatively stable over time. 2. When the Central bank changes the quantity of mo ...
... money (M) to the nominal value of output (P x Y). According to this theory inflation is exclusively caused by the growth of money supply. The assumptions needed to fulfill that statement are: 1. The velocity of money is relatively stable over time. 2. When the Central bank changes the quantity of mo ...
Homework #5, Due Tuesday, Nov 14
... 15) Suppose the money market has an equilibrium interest rate of 10 percent. If the actual interest was 8 percent, the quantity of money demanded would be greater than the quantity of money supplied. Which of the following would bring the money market back to equilibrium? A) People buy bonds, the p ...
... 15) Suppose the money market has an equilibrium interest rate of 10 percent. If the actual interest was 8 percent, the quantity of money demanded would be greater than the quantity of money supplied. Which of the following would bring the money market back to equilibrium? A) People buy bonds, the p ...
Answers to Practice Question 8
... b. The equilibrium interest rate: 9%. To see this use the equation from 15 (d) for money demand and see that the change in equilibrium Y is $2000 Billion due to the change in government spending. d. The equilibrium real GDP: $5,500 billion. The original increase in the government expenditure partial ...
... b. The equilibrium interest rate: 9%. To see this use the equation from 15 (d) for money demand and see that the change in equilibrium Y is $2000 Billion due to the change in government spending. d. The equilibrium real GDP: $5,500 billion. The original increase in the government expenditure partial ...
Ch.16-Q1. In the economy of Scottopia, policy makers want to lower
... its workers put in longer hours, rather than by hiring more workers. The second reason is that the number of workers looking for jobs is affected by the availability of jobs. As the economy adds jobs, some people who had not been actively looking for work during the recession may begin doing so. Ch1 ...
... its workers put in longer hours, rather than by hiring more workers. The second reason is that the number of workers looking for jobs is affected by the availability of jobs. As the economy adds jobs, some people who had not been actively looking for work during the recession may begin doing so. Ch1 ...
The importance of inflation expectations
... Box 1: The importance of inflation expectations The credibility of central banks acting within an inflation targeting framework is extremely important, since it allows the sustainable anchoring of economic agents’ expectations. As a direct consequence, their decisions and behaviour will rely to an i ...
... Box 1: The importance of inflation expectations The credibility of central banks acting within an inflation targeting framework is extremely important, since it allows the sustainable anchoring of economic agents’ expectations. As a direct consequence, their decisions and behaviour will rely to an i ...