Principles of Macroeconomics Take
... 20. When inflation is much higher than expected, which of the following is true? [A] Nominal incomes are lower than expected. [B] Nominal interest rates are lower than expected. [C] Real interest rates are higher than expected. [D] Real interest rates are lower than expected. 21. If the inflation ra ...
... 20. When inflation is much higher than expected, which of the following is true? [A] Nominal incomes are lower than expected. [B] Nominal interest rates are lower than expected. [C] Real interest rates are higher than expected. [D] Real interest rates are lower than expected. 21. If the inflation ra ...
inflation and unemployment slide show a2 2009 - burgate
... Firms may consider rationalisation – reorganising the business to improve efficiency and cut back on fixed overheads. E.g delayering, closing a site, or outsourcing ...
... Firms may consider rationalisation – reorganising the business to improve efficiency and cut back on fixed overheads. E.g delayering, closing a site, or outsourcing ...
1. The model used to study - E-SGH
... b. during which capital and labor are sometimes not fully employed. c. during which prices are flexible. d. during which output deviates from the full-employment level. 23. The natural level of output is: a. affected by aggregate demand. b. the level of output at which the unemployment rate is zero. ...
... b. during which capital and labor are sometimes not fully employed. c. during which prices are flexible. d. during which output deviates from the full-employment level. 23. The natural level of output is: a. affected by aggregate demand. b. the level of output at which the unemployment rate is zero. ...
Midterm Exam #2 2008
... The question relates to the effects of money on the economy a. What do economists mean by the Quantity Theory of Money? b. How can the Quantity Theory of Money be used to support Friedman’s claim at the beginning of this exam? c. Why are there so many different definitions of money? d. Are credit ca ...
... The question relates to the effects of money on the economy a. What do economists mean by the Quantity Theory of Money? b. How can the Quantity Theory of Money be used to support Friedman’s claim at the beginning of this exam? c. Why are there so many different definitions of money? d. Are credit ca ...
Causes of Inflation
... terms, institutions such as "the minimum wage" deter employers from hiring all of the available workers, because the cost would exceed the technologically-determined benefit of hiring them. Some economists theorize that this type of unemployment can be reduced by increasing the flexibility of wages ...
... terms, institutions such as "the minimum wage" deter employers from hiring all of the available workers, because the cost would exceed the technologically-determined benefit of hiring them. Some economists theorize that this type of unemployment can be reduced by increasing the flexibility of wages ...
MACRO Study Guide Before AP 2009
... This is a nominal interest rate (really the federal funds rate). Money Demand is based on speculative demand, precautionary demand & price level. So we hold more money when consumers get ‘scared”. You rarely shift MD on AP tests—but sometimes they do require it! ...
... This is a nominal interest rate (really the federal funds rate). Money Demand is based on speculative demand, precautionary demand & price level. So we hold more money when consumers get ‘scared”. You rarely shift MD on AP tests—but sometimes they do require it! ...
Aggregate Supply - Economics @ Tallis
... • When output is low, forms can purchase more factors of production without raising their prices, so more can be produced without increasing average cost. • As output rises, firms start to compete for resources, their prices rise and the cost of production increases. • As shortage of resources incre ...
... • When output is low, forms can purchase more factors of production without raising their prices, so more can be produced without increasing average cost. • As output rises, firms start to compete for resources, their prices rise and the cost of production increases. • As shortage of resources incre ...
Monetary Policy and the Econnomy
... Recall the in LR, the adjustment of prices and wages will cause the economy to gravitate back towards potential GDP (YP). Monetary policy has no effect on YP (only labor productivity and labor force). MS Y > YP inflationary gap W and P Y returns to YP ...
... Recall the in LR, the adjustment of prices and wages will cause the economy to gravitate back towards potential GDP (YP). Monetary policy has no effect on YP (only labor productivity and labor force). MS Y > YP inflationary gap W and P Y returns to YP ...
introduction and measurement
... remained low, although the unemployment rate gradually fell. Between 1990 and 1991, the unemployment rate rose although the inflation rate fell. From 1992 to 1997 both the inflation and unemployment rates fell. During the 2000s, inflation has remained stable and low, while unemployment rose signific ...
... remained low, although the unemployment rate gradually fell. Between 1990 and 1991, the unemployment rate rose although the inflation rate fell. From 1992 to 1997 both the inflation and unemployment rates fell. During the 2000s, inflation has remained stable and low, while unemployment rose signific ...
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... remained low, although the unemployment rate gradually fell. Between 1990 and 1991, the unemployment rate rose although the inflation rate fell. From 1992 to 1997 both the inflation and unemployment rates fell. During the 2000s, inflation has remained stable and low, while unemployment rose signific ...
... remained low, although the unemployment rate gradually fell. Between 1990 and 1991, the unemployment rate rose although the inflation rate fell. From 1992 to 1997 both the inflation and unemployment rates fell. During the 2000s, inflation has remained stable and low, while unemployment rose signific ...
Principles of Economics
... enters graduate school. She has received 2 job offers with the following salary structures: JOB A : pays $ 25,000 in 2012 and $25,350 in 2013 JOB B : pays $ 25,000 in 2012; 2013’s salary will be equal to $25,000 plus a cost of living adjustment ( i.e., a raise equal to the inflation rate in 2013) Su ...
... enters graduate school. She has received 2 job offers with the following salary structures: JOB A : pays $ 25,000 in 2012 and $25,350 in 2013 JOB B : pays $ 25,000 in 2012; 2013’s salary will be equal to $25,000 plus a cost of living adjustment ( i.e., a raise equal to the inflation rate in 2013) Su ...
AP Macro Economics Chapter Eight Introduction to Economic
... "For every 1 percentage point that the actual unemployment rate exceeds the natural rate, a 2 percentage point GDP gap occurs." This is a statement of Okun's law. ...
... "For every 1 percentage point that the actual unemployment rate exceeds the natural rate, a 2 percentage point GDP gap occurs." This is a statement of Okun's law. ...
AP review wk 2
... – Results from a poor match of workers’ abilities and skills with current requirements of employers ...
... – Results from a poor match of workers’ abilities and skills with current requirements of employers ...
U4 Study Guide
... 27. Describe the aggregate demand curve and the aggregate supply curve, and show how they determine the equilibrium level of price and aggregate output. ...
... 27. Describe the aggregate demand curve and the aggregate supply curve, and show how they determine the equilibrium level of price and aggregate output. ...
Economics 154a, Spring 2005 Intermediate
... ANSWER: The IS curve is given by Y = C d + I d + G = 300 + 0.5(Y − 100) − 300r + 100 − 100r + 100 = 450 + 0.5Y − 400r. This can be rewritten as 0.5Y = 450 − 400r, or Y = 900 − 800r. The LM curve is M/P = L, or 6300/P = 0.5Y - 200r. To find the aggregate demand curve, substitute the LM curve into the ...
... ANSWER: The IS curve is given by Y = C d + I d + G = 300 + 0.5(Y − 100) − 300r + 100 − 100r + 100 = 450 + 0.5Y − 400r. This can be rewritten as 0.5Y = 450 − 400r, or Y = 900 − 800r. The LM curve is M/P = L, or 6300/P = 0.5Y - 200r. To find the aggregate demand curve, substitute the LM curve into the ...
(G – T) + (X – M)
... good X in terms of good Y implies a fall in the relative price of the good Y in terms of the good X at the same time. Thus, there cannot be a general rise in relative prices. ...
... good X in terms of good Y implies a fall in the relative price of the good Y in terms of the good X at the same time. Thus, there cannot be a general rise in relative prices. ...
Economics 259 Final Exam Fall 2014 Name: Before beginning the
... increase. Since Sweden and Denmark are the same in every other way, P will grow faster in Sweden. 2) According to the quantity theory, if the rates of money growth and real GDP growth are the same, differences in rates of inflation are related to differences in velocity. The faster increase in veloc ...
... increase. Since Sweden and Denmark are the same in every other way, P will grow faster in Sweden. 2) According to the quantity theory, if the rates of money growth and real GDP growth are the same, differences in rates of inflation are related to differences in velocity. The faster increase in veloc ...
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.