QUIZ 1 - Solutions 14.02 Principles of Macroeconomics March 3, 2005
... The wage setting equation in Ch. 6 does not account for productivity increases. The evidence suggests that other things being equal, wages are typically set to re‡ect the increase in productivity over time. If productivity has been growing at 3% a year on average for some time, then wage contracts w ...
... The wage setting equation in Ch. 6 does not account for productivity increases. The evidence suggests that other things being equal, wages are typically set to re‡ect the increase in productivity over time. If productivity has been growing at 3% a year on average for some time, then wage contracts w ...
No: 2012 – 56 Release date: 27 November 2012
... continues, and credit volumes keep growing at reasonable rates consistent with the financial stability objectives. On the other hand, it was indicated that the steady real appreciation trend in domestic currency observed since the beginning of the year should be closely monitored. The Committee remi ...
... continues, and credit volumes keep growing at reasonable rates consistent with the financial stability objectives. On the other hand, it was indicated that the steady real appreciation trend in domestic currency observed since the beginning of the year should be closely monitored. The Committee remi ...
View/Open
... doing business and in making the system more rigid. These are gradual changes. In the short run, we now have a rigid system and it has been hit with many shocks in the 70's. What are the appropriate policies? Aggregate demand restraint is an obvious policy to deal with the economic system. It is cle ...
... doing business and in making the system more rigid. These are gradual changes. In the short run, we now have a rigid system and it has been hit with many shocks in the 70's. What are the appropriate policies? Aggregate demand restraint is an obvious policy to deal with the economic system. It is cle ...
14.02 Principles of Macroeconomics Problem Set 2 Solutions Spring 2003
... 8. The president’s political adviser says that war with Iraq will cause oil prices to increase only temporarily. He says that when prices drop to their original level, the AS curve will move back to where it was, and output will also return to its original level. If this is the case, the economy wil ...
... 8. The president’s political adviser says that war with Iraq will cause oil prices to increase only temporarily. He says that when prices drop to their original level, the AS curve will move back to where it was, and output will also return to its original level. If this is the case, the economy wil ...
ECON 2020-400 Principles of Macroeconomics
... Office Hours : TR 3:30 - 5:00 pm TA: Jon Matheiu University of Colorado @ Boulder ...
... Office Hours : TR 3:30 - 5:00 pm TA: Jon Matheiu University of Colorado @ Boulder ...
Keynesian Economics madmen in authority are the slaves of some
... An alternative way to think about price stickiness ...
... An alternative way to think about price stickiness ...
Potential GDP
... Trade-off between Unemployment and Inflation • If the economy grows too fast – that is, if actual GDP is too high relative to potential GDP – we get rising inflation. • If the economy grows too slowly - if actual GDP is too low relative to potential GDP – we get unemployment. • The job for policyma ...
... Trade-off between Unemployment and Inflation • If the economy grows too fast – that is, if actual GDP is too high relative to potential GDP – we get rising inflation. • If the economy grows too slowly - if actual GDP is too low relative to potential GDP – we get unemployment. • The job for policyma ...
Answer Key for Problem Set 4
... (a). After government’s announcement, if the public believe it, they would expect the long-run exchange rate will increase. As a result, the AA curve shift rightwardly. The new equilibrium is at point 2. Both the output and the exchange rate will increase. (b), After implementing the monetary expans ...
... (a). After government’s announcement, if the public believe it, they would expect the long-run exchange rate will increase. As a result, the AA curve shift rightwardly. The new equilibrium is at point 2. Both the output and the exchange rate will increase. (b), After implementing the monetary expans ...
cyprus international university
... The Basic Tools of Finance defines the basic instrumens in fiscal sector for better understanding the role of financial sector in macro economy. • calculating present value and future value • Consider the effects of compound growth • Learn how risk-averse people reduce the risk they face • Analyses ...
... The Basic Tools of Finance defines the basic instrumens in fiscal sector for better understanding the role of financial sector in macro economy. • calculating present value and future value • Consider the effects of compound growth • Learn how risk-averse people reduce the risk they face • Analyses ...
Summer B 2015 Practice Test #3 - MDC Faculty Web Pages
... B) increase; weaker; higher C) increase; stronger; lower D) decrease; weaker; lower ...
... B) increase; weaker; higher C) increase; stronger; lower D) decrease; weaker; lower ...
chapter 9 the aggregate demand – aggregate supply (ad
... 6. Which of the following statements is true? a. The multiplier (repercussion) effects cause the AD curve to be steeper than in the absence of those multiplier effects. b. Because of the multiplier effects, when an initial shift factor of the AD curve equals, say 100, the AD curve will shift by a mu ...
... 6. Which of the following statements is true? a. The multiplier (repercussion) effects cause the AD curve to be steeper than in the absence of those multiplier effects. b. Because of the multiplier effects, when an initial shift factor of the AD curve equals, say 100, the AD curve will shift by a mu ...
IGCSE Inflation - Oldfield Economics
... importance to different groups of people and decision makers. A price index is therefore used to calculate changes in their real values over time For indexation Indexation involves increasing certain payments and values, such as state pensions and income tax thresholds, by the annual rate of increas ...
... importance to different groups of people and decision makers. A price index is therefore used to calculate changes in their real values over time For indexation Indexation involves increasing certain payments and values, such as state pensions and income tax thresholds, by the annual rate of increas ...
Ch24
... Chapter 24 Money and Inflation 1. "There are frequently years when the inflation rate is high and yet money growth is quite low. Therefore, the statement that inflation is a monetary phenomenon cannot be correct." Comment. 2. Why do economists focus on historical episodes of hyperinflation to decide ...
... Chapter 24 Money and Inflation 1. "There are frequently years when the inflation rate is high and yet money growth is quite low. Therefore, the statement that inflation is a monetary phenomenon cannot be correct." Comment. 2. Why do economists focus on historical episodes of hyperinflation to decide ...
Anti-Inflationary Policies in a Democratic Free Market Society Barry Bosworth
... the structure of our economy and attempted to make it more humane by dealing with its worst features and the cruelties of competition. But these changes have made the problem of inflation worse; we have given groups in society more and more discretion over their ability to set wages and prices. If w ...
... the structure of our economy and attempted to make it more humane by dealing with its worst features and the cruelties of competition. But these changes have made the problem of inflation worse; we have given groups in society more and more discretion over their ability to set wages and prices. If w ...
1 Problem
... 1. The price level increases by 5 percetage for a technologycal shock compare to initial case. What is the equation of short-run supply curve? 2. What is the equilibrium value of output in the short run if the central bank will not influence this economics situation? 3. Yielding to the labor union’s ...
... 1. The price level increases by 5 percetage for a technologycal shock compare to initial case. What is the equation of short-run supply curve? 2. What is the equilibrium value of output in the short run if the central bank will not influence this economics situation? 3. Yielding to the labor union’s ...
3.2.2.2 Aggregate demand and aggregate supply analysis
... more, because they feel as though they will get a higher return on them. This is affected by anticipated income and inflation. o If the Monetary Policy Committee lowers interest rates, it is cheaper to borrow and reduces the incentive to save, so spending and investment increase. However, there are ...
... more, because they feel as though they will get a higher return on them. This is affected by anticipated income and inflation. o If the Monetary Policy Committee lowers interest rates, it is cheaper to borrow and reduces the incentive to save, so spending and investment increase. However, there are ...
Unemployment
... and GDP is expressed by Okun’s Law. • Okun’s Law says that the percentage change in real GDP equals 3% - 2 times the change in the unemployment rate. Why? – GDP has grown over the long run by 3%, and Okun found that for every 1% increase in unemployment real GDP growth fell by 2%. ...
... and GDP is expressed by Okun’s Law. • Okun’s Law says that the percentage change in real GDP equals 3% - 2 times the change in the unemployment rate. Why? – GDP has grown over the long run by 3%, and Okun found that for every 1% increase in unemployment real GDP growth fell by 2%. ...
Phillips curve
In economics, the Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation that result in an economy. Stated simply, decreased unemployment, (i.e., increased levels of employment) in an economy will correlate with higher rates of inflation.While there is a short run tradeoff between unemployment and inflation, it has not been observed in the long run. In 1968, Milton Friedman asserted that the Phillips Curve was only applicable in the short-run and that in the long-run, inflationary policies will not decrease unemployment. Friedman then correctly predicted that, in the upcoming years after 1968, both inflation and unemployment would increase. The long-run Phillips Curve is now seen as a vertical line at the natural rate of unemployment, where the rate of inflation has no effect on unemployment. Accordingly, the Phillips curve is now seen as too simplistic, with the unemployment rate supplanted by more accurate predictors of inflation based on velocity of money supply measures such as the MZM (""money zero maturity"") velocity, which is affected by unemployment in the short but not the long term.