Temporarily Unstable Government Debt and Inflation
... • Does the model really need to be based on increasing transfers and looming pressures from aging? Wouldn’t the results be motivated by any increase in the deficit, regardless of the source? • How does the paper relate/compare with Drazen and Helpman (REStud, 1990), who make sense of the difficultie ...
... • Does the model really need to be based on increasing transfers and looming pressures from aging? Wouldn’t the results be motivated by any increase in the deficit, regardless of the source? • How does the paper relate/compare with Drazen and Helpman (REStud, 1990), who make sense of the difficultie ...
Effects of Inflation
... It is not easy to achieve, given all the factors that comes to play. • Measuring inflation Inflation is measured based on actual price changes of basic commodities. This gets complicated since different goods exhibit different price change patterns. Predicting future inflation rates is not t ...
... It is not easy to achieve, given all the factors that comes to play. • Measuring inflation Inflation is measured based on actual price changes of basic commodities. This gets complicated since different goods exhibit different price change patterns. Predicting future inflation rates is not t ...
Macro Chapter 8 study guide questions
... inflation or due to shifts in supply or demand in a given market. c. Individuals will want to make long-term contracts in order to enjoy the benefits of higher prices. d. Some resources will be wasted as suppliers have to reprint menus and price catalogues to reflect the new, higher prices. ...
... inflation or due to shifts in supply or demand in a given market. c. Individuals will want to make long-term contracts in order to enjoy the benefits of higher prices. d. Some resources will be wasted as suppliers have to reprint menus and price catalogues to reflect the new, higher prices. ...
ecn121 tutorial kit - Covenant University
... Real GDP increases, the price level rises, and an inflationary gap arise. The rising price level is the first step in the demand-pull inflation. The higher level of output means that real GDP exceeds potential GDP—an inflationary gap. The money wages rises and the SAS curve shifts leftward. Real GDP ...
... Real GDP increases, the price level rises, and an inflationary gap arise. The rising price level is the first step in the demand-pull inflation. The higher level of output means that real GDP exceeds potential GDP—an inflationary gap. The money wages rises and the SAS curve shifts leftward. Real GDP ...
14.02 Principles of Macroeconomics Problem Set 3 Fall 2005
... (1 + µ ) 3) In an economy where product markets are not perfectly competitive (that is firms can charge prices higher than the marginal cost), it is always optimal for a profit maximizing firm to choose a combination of price P and markup µ such that P = W = reservation wage. (1 + µ ) 4) An increase ...
... (1 + µ ) 3) In an economy where product markets are not perfectly competitive (that is firms can charge prices higher than the marginal cost), it is always optimal for a profit maximizing firm to choose a combination of price P and markup µ such that P = W = reservation wage. (1 + µ ) 4) An increase ...
Mid-Summer Examinations 2015
... 6. If a country’s population increases: ) Real GDP per capita will always increase b) Nominal GDP per capita will always decrease c) Real GDP per capita may increase, decrease, or remain the same d) None of the above 7. A person is unemployed if she is not employed and ... : ) wants to work b) has ...
... 6. If a country’s population increases: ) Real GDP per capita will always increase b) Nominal GDP per capita will always decrease c) Real GDP per capita may increase, decrease, or remain the same d) None of the above 7. A person is unemployed if she is not employed and ... : ) wants to work b) has ...
總體經濟學 期末考 日期：97
... 3. Each of the following conditions will tend to reduce the sacrifice ratio except when: (A) workers and firms set wages and prices based on rational expectations. (B) policymakers make credible commitments to policy changes. (C) announcements of policy changes are made before workers and firms have ...
... 3. Each of the following conditions will tend to reduce the sacrifice ratio except when: (A) workers and firms set wages and prices based on rational expectations. (B) policymakers make credible commitments to policy changes. (C) announcements of policy changes are made before workers and firms have ...
Document
... relative to another Since prices usually do not move in unison, tying a particular product’s price to the overall inflation rate may result in a price that is too high or too low based on market conditions ...
... relative to another Since prices usually do not move in unison, tying a particular product’s price to the overall inflation rate may result in a price that is too high or too low based on market conditions ...
Labour Force
... Inflation redistributes purchasing power between incomes, and borrowing and lending Many labour unions negotiate adjustments such as the cost-ofliving Three types of indexation include: fully indexed incomes, partially indexed incomes, and fixed incomes During periods of inflation, people who are fu ...
... Inflation redistributes purchasing power between incomes, and borrowing and lending Many labour unions negotiate adjustments such as the cost-ofliving Three types of indexation include: fully indexed incomes, partially indexed incomes, and fixed incomes During periods of inflation, people who are fu ...
L10_20110429
... Aggregate Demand, Aggregate Supply, and the Phillips Curve • The Phillips curve illustrates the short-run relationship between inflation and unemployment. • The Phillips curve shows the short-run combinations of unemployment and inflation that arise as shifts in the aggregate demand curve move the ...
... Aggregate Demand, Aggregate Supply, and the Phillips Curve • The Phillips curve illustrates the short-run relationship between inflation and unemployment. • The Phillips curve shows the short-run combinations of unemployment and inflation that arise as shifts in the aggregate demand curve move the ...
Answers to the sample exam
... implications of (i) demand-pull and (ii) cost-push inflation in both the short-run and the long-run. – Answer: Assume we start with the economy at the natural rate of output and unemployment. Demand-pull inflation is caused by shocks to aggregate expenditure that push aggregate demand above aggregat ...
... implications of (i) demand-pull and (ii) cost-push inflation in both the short-run and the long-run. – Answer: Assume we start with the economy at the natural rate of output and unemployment. Demand-pull inflation is caused by shocks to aggregate expenditure that push aggregate demand above aggregat ...
Spring 2009
... Part I. Multiple-guess (each 2½ points) Select the best answer. 1. The per-worker production function in the Solow model assumes: (a) constant returns to scale and increasing marginal productivity of capital. (b) constant returns to scale and diminishing marginal productivity of capital. (c) increas ...
... Part I. Multiple-guess (each 2½ points) Select the best answer. 1. The per-worker production function in the Solow model assumes: (a) constant returns to scale and increasing marginal productivity of capital. (b) constant returns to scale and diminishing marginal productivity of capital. (c) increas ...
inflation rate
... We use instruments dated t-1 or earlier for two reasons: First, there is likely to be considerable error in our measure of marginal cost. Assuming this error is uncorrelated with past information, it is appropriate to use lagged instruments. Second, not all current information may be available ...
... We use instruments dated t-1 or earlier for two reasons: First, there is likely to be considerable error in our measure of marginal cost. Assuming this error is uncorrelated with past information, it is appropriate to use lagged instruments. Second, not all current information may be available ...
FedViews
... The gap between the actual and natural rate of unemployment is one measure of resource slack. A related measure is the gap between potential and actual output. Potential is what output would be if the workforce and productive capacity were fully utilized at sustainable, noninflationary levels. Our c ...
... The gap between the actual and natural rate of unemployment is one measure of resource slack. A related measure is the gap between potential and actual output. Potential is what output would be if the workforce and productive capacity were fully utilized at sustainable, noninflationary levels. Our c ...
Key - Personal.psu.edu
... Government increases spending (infrastructure) by $ 1 Trillion. What is the new expression for the IS curve now? Y = [ 3 + 2.2 -.2 + 4.0 + 1.5 - 1.5] x (1 / 1 - .5) - (.1 + .2 + .2)/(1 - .5) r Y = 18 - r i) Resolve for the new Y, π and r. Again, assume that inflation expectations are unchanged. Labe ...
... Government increases spending (infrastructure) by $ 1 Trillion. What is the new expression for the IS curve now? Y = [ 3 + 2.2 -.2 + 4.0 + 1.5 - 1.5] x (1 / 1 - .5) - (.1 + .2 + .2)/(1 - .5) r Y = 18 - r i) Resolve for the new Y, π and r. Again, assume that inflation expectations are unchanged. Labe ...
economic polices to control inflation
... negotiations. This is rarely sufficient on its own. Wage inflation normally falls when the economy is heading into recession and unemployment starts to rise. This causes greater job insecurity and some workers may trade off lower pay claims for some degree of employment protection. Equally so Govern ...
... negotiations. This is rarely sufficient on its own. Wage inflation normally falls when the economy is heading into recession and unemployment starts to rise. This causes greater job insecurity and some workers may trade off lower pay claims for some degree of employment protection. Equally so Govern ...
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.