SECTION 5: The Financial Sector Need to Know
... which funds are borrowed and lent in the federal funds market, plays a key role in modern monetary policy. • Discount Rate is the rate of interest the Fed charges on loans to banks that do not meet their reserve requirements (set 1 percentage point above the federal funds rate – that is why t ...
... which funds are borrowed and lent in the federal funds market, plays a key role in modern monetary policy. • Discount Rate is the rate of interest the Fed charges on loans to banks that do not meet their reserve requirements (set 1 percentage point above the federal funds rate – that is why t ...
The Economic Theories all in one
... • The rational-expectations hypothesis assumes people know the “true model” of the economy and that they use this model to form their expectations of the future. • By “true” model we mean a model that is on average correct in forecasting inflation. • Developed by John F. Muth in the sixties. • The t ...
... • The rational-expectations hypothesis assumes people know the “true model” of the economy and that they use this model to form their expectations of the future. • By “true” model we mean a model that is on average correct in forecasting inflation. • Developed by John F. Muth in the sixties. • The t ...
Module 33 - Types of Infl
... • Politicians may use fiscal policy such as tax cuts or public works during election years, leaving the costs of inflation until after they win the election ...
... • Politicians may use fiscal policy such as tax cuts or public works during election years, leaving the costs of inflation until after they win the election ...
The Quantity Theory of Money
... level of GDP assumed to be fixed), this will mean that there is MORE money in circulation chasing the same quantity of goods. This in turn bids up prices as the purchasing power of each dollar falls. The end result will be a proportional increase in the price level, i.e. 15% increase in P. ...
... level of GDP assumed to be fixed), this will mean that there is MORE money in circulation chasing the same quantity of goods. This in turn bids up prices as the purchasing power of each dollar falls. The end result will be a proportional increase in the price level, i.e. 15% increase in P. ...
Monetary Policy
... tend to borrow less money from the Fed when the Discount Rate is higher--thus, less mony is lent out and circulated into the money supply. 4. Other tools that have sometimes been used: “Moral suasion” (the Fed just tries to talk member banks into either expanding or contracting their loans, sort of ...
... tend to borrow less money from the Fed when the Discount Rate is higher--thus, less mony is lent out and circulated into the money supply. 4. Other tools that have sometimes been used: “Moral suasion” (the Fed just tries to talk member banks into either expanding or contracting their loans, sort of ...
Eco 212_____Name
... order to maximize the productivity per dollar spent on wages. The model also implies: (i) there may be involuntarily unemployed workers even when the labor market is working as well as we can expect. (ii) unemployed workers can obtain jobs by offering to work at a wage slightly lower than the wage c ...
... order to maximize the productivity per dollar spent on wages. The model also implies: (i) there may be involuntarily unemployed workers even when the labor market is working as well as we can expect. (ii) unemployed workers can obtain jobs by offering to work at a wage slightly lower than the wage c ...
Course Outline School of Business and Economics ECON 1950
... Students examine economic behaviour at the aggregate level, and the measurement and determination of national income. Topics include an introduction to economics; measuring macroeconomic variables including gross domestic product, unemployment, and inflation; the Keynesian model; aggregate demand an ...
... Students examine economic behaviour at the aggregate level, and the measurement and determination of national income. Topics include an introduction to economics; measuring macroeconomic variables including gross domestic product, unemployment, and inflation; the Keynesian model; aggregate demand an ...
Why Study Money, Banking, and Financial Markets?
... – Budget deficit is the excess of expenditures over revenues for a particular year – Budget surplus is the excess of revenues over expenditures for a particular year – Any deficit must be financed by borrowing ...
... – Budget deficit is the excess of expenditures over revenues for a particular year – Budget surplus is the excess of revenues over expenditures for a particular year – Any deficit must be financed by borrowing ...
Chopper Money? - Matthews Asia
... recently, Zimbabwe in 2008 were disastrous. At the risk of over-simplification, the tone of the policies these countries undertook was a drastic increase in the money supply, which led to hyperinflation, and a worthless currency, and ended in a major economic recession and political turmoil. However ...
... recently, Zimbabwe in 2008 were disastrous. At the risk of over-simplification, the tone of the policies these countries undertook was a drastic increase in the money supply, which led to hyperinflation, and a worthless currency, and ended in a major economic recession and political turmoil. However ...
International Insolvency Law Organisational matters
... Actual creation of money depends on the credit expansion - actual volume of lending by commercial banks and of the resulting deposits. Lending by commercial banks is influenced by interest rates of the central bank set within the framework of its monetary policy (see next course). ...
... Actual creation of money depends on the credit expansion - actual volume of lending by commercial banks and of the resulting deposits. Lending by commercial banks is influenced by interest rates of the central bank set within the framework of its monetary policy (see next course). ...
Econ110: Principles of Economics TEST YOUR UNDERSTANDING
... suggests that this is a. above the natural rate, so real GDP growth was likely low. b. above the natural rate, so real GDP growth was likely high. c. below the natural rate, so real GDP growth was likely low. d. below the natural rate, so real GDP growth was likely high. ...
... suggests that this is a. above the natural rate, so real GDP growth was likely low. b. above the natural rate, so real GDP growth was likely high. c. below the natural rate, so real GDP growth was likely low. d. below the natural rate, so real GDP growth was likely high. ...
Inflation
... OMOs are the means of implementing monetary policy by which a central bank controls the nation’s money supply by buying and selling government securities, or other financial instruments ...
... OMOs are the means of implementing monetary policy by which a central bank controls the nation’s money supply by buying and selling government securities, or other financial instruments ...
File
... • Banks are required to keep a percentage of their total deposits in cash reserves in their vaults or with the Federal Reserve bank. • This enables the bank to provide funds for customers who might suddenly want to withdraw large amounts of cash from their accounts. • Currently most financial instit ...
... • Banks are required to keep a percentage of their total deposits in cash reserves in their vaults or with the Federal Reserve bank. • This enables the bank to provide funds for customers who might suddenly want to withdraw large amounts of cash from their accounts. • Currently most financial instit ...
No Slide Title
... a) Demand for currency comes from both a demand for domestic products and a demand for domestic assets. b) If bond supply increases, then prices of bonds will fall, interest rates will rise, and there demand for currency from foreigners will rise pushing up the exchange rate and reducing aggregate d ...
... a) Demand for currency comes from both a demand for domestic products and a demand for domestic assets. b) If bond supply increases, then prices of bonds will fall, interest rates will rise, and there demand for currency from foreigners will rise pushing up the exchange rate and reducing aggregate d ...
Money
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered money.Money is historically an emergent market phenomenon establishing a commodity money, but nearly all contemporary money systems are based on fiat money. Fiat money, like any check or note of debt, is without intrinsic use value as a physical commodity. It derives its value by being declared by a government to be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for ""all debts, public and private"". Such laws in practice cause fiat money to acquire the value of any of the goods and services that it may be traded for within the nation that issues it.The money supply of a country consists of currency (banknotes and coins) and, depending on the particular definition used, one or more types of bank money (the balances held in checking accounts, savings accounts, and other types of bank accounts). Bank money, which consists only of records (mostly computerized in modern banking), forms by far the largest part of broad money in developed countries.