Macroeconomic Unit 1 Basic Economic Concepts
... Should policymakers expand or contract the economy ...
... Should policymakers expand or contract the economy ...
Interactive Tool
... That is (170 - 150) / 150 = .133 or 13.3 percent. Because this is over a twelvemonth period, it is an annual rate of inflation. More difficult interpretations are based on single month changes. The results are normally converted to annual rates of inflation. 4. A current level of 160 would mean that ...
... That is (170 - 150) / 150 = .133 or 13.3 percent. Because this is over a twelvemonth period, it is an annual rate of inflation. More difficult interpretations are based on single month changes. The results are normally converted to annual rates of inflation. 4. A current level of 160 would mean that ...
Midterm 2 - Fall 2014
... Up. If input costs go up, then firms will supply less even though the real wage is lower than it was in the long-‐run equilibrium before. ...
... Up. If input costs go up, then firms will supply less even though the real wage is lower than it was in the long-‐run equilibrium before. ...
2.2 Aggregate Demand, Supply and Equilibrium
... Explain, using a diagram, that the monetarist/new classical model of the long-run aggregate supply curve (LRAS) is vertical at the level of potential output (full employment output) because aggregate supply in the long run is independent of the price 1 – The meaning of level. aggregate supply Explai ...
... Explain, using a diagram, that the monetarist/new classical model of the long-run aggregate supply curve (LRAS) is vertical at the level of potential output (full employment output) because aggregate supply in the long run is independent of the price 1 – The meaning of level. aggregate supply Explai ...
Open Economy Macroeconomics: Basic Concepts
... Supplemental readings: In addition to the textbook, students will frequently be assigned other reading relating to the current unit of study. Students will often be required to be prepared to discuss and/or apply the readings to other activities within the course. Vocabulary Flash Cards: vocabulary ...
... Supplemental readings: In addition to the textbook, students will frequently be assigned other reading relating to the current unit of study. Students will often be required to be prepared to discuss and/or apply the readings to other activities within the course. Vocabulary Flash Cards: vocabulary ...
Chapter 20 – Practice Questions 1. Which of the following is correct
... b. They are associated with comparatively large declines in investment spending. c. They are any period when real GDP growth is less than average. d. They tend to be associated with falling unemployment rates. ...
... b. They are associated with comparatively large declines in investment spending. c. They are any period when real GDP growth is less than average. d. They tend to be associated with falling unemployment rates. ...
Inflation Dynamics During and After the Zero Lower Bound Introduction
... Experiment 1. In our first experiment we ask the following question: what would have happened in the U.S., had the Fed targeted a 4% inflation rate throughout our sample? The results are depicted in Figure 4 of the handout. The solid black lines correspond to the actual data. We consider two alterna ...
... Experiment 1. In our first experiment we ask the following question: what would have happened in the U.S., had the Fed targeted a 4% inflation rate throughout our sample? The results are depicted in Figure 4 of the handout. The solid black lines correspond to the actual data. We consider two alterna ...
Mankiw90
... famous prediction of Milton Friedman (1968) and Edmund Phelps (1968). According to the unadorned Phillips curve, one could achieve and maintain a permanently low level of unemployment merely by tolerating a permanently high level of inflation. In the late 1960s, when the consensus view was still in ...
... famous prediction of Milton Friedman (1968) and Edmund Phelps (1968). According to the unadorned Phillips curve, one could achieve and maintain a permanently low level of unemployment merely by tolerating a permanently high level of inflation. In the late 1960s, when the consensus view was still in ...
Goods and Financial Markets1: IS-LM
... Mechanics of fiscal expansion Goods market effects As G Y= too immediately Then C= and I = also Multiplier effect: at same i, Y reaches a higher level as IS shifts to the right Financial markets effects As Y the demand for money M = and the ward shift in Md results in a i, but this is a movement al ...
... Mechanics of fiscal expansion Goods market effects As G Y= too immediately Then C= and I = also Multiplier effect: at same i, Y reaches a higher level as IS shifts to the right Financial markets effects As Y the demand for money M = and the ward shift in Md results in a i, but this is a movement al ...
Sample 2nd MT - Compiler Press
... A) the relationship between the price level and real GDP demanded by consumers, investors, governments, and net exporters. B) the relationship between the quantity of real GDP supplied and the price level when the money wage rate, the prices of other resources, and potential GDP remain constant. C) ...
... A) the relationship between the price level and real GDP demanded by consumers, investors, governments, and net exporters. B) the relationship between the quantity of real GDP supplied and the price level when the money wage rate, the prices of other resources, and potential GDP remain constant. C) ...
17 - Seattle Central College
... • The velocity of money is relatively stable over time. • When the Fed changes the quantity of money, it causes proportionate changes in the nominal value of output (P × Y). • Because money is neutral, money does not affect output. ...
... • The velocity of money is relatively stable over time. • When the Fed changes the quantity of money, it causes proportionate changes in the nominal value of output (P × Y). • Because money is neutral, money does not affect output. ...
FOE September 2015 Exam Paper – Final
... iii) Explain how banks are able to create money and thus expand the money supply. Use a numeric example to support your explanation. ...
... iii) Explain how banks are able to create money and thus expand the money supply. Use a numeric example to support your explanation. ...
The Phillips Curve in the 1990s - Digital Commons @ IWU
... expectations-augmented Phillips curve (The Economist, 1994). They argued that there should not be a stable negative relationship between inflation and unemployment, but instead between unanticipated inflation and cyclical unemployment.1 Based on misperceptions theory, Friedman and Phelps assume that ...
... expectations-augmented Phillips curve (The Economist, 1994). They argued that there should not be a stable negative relationship between inflation and unemployment, but instead between unanticipated inflation and cyclical unemployment.1 Based on misperceptions theory, Friedman and Phelps assume that ...
Monetary Policy Decision Making - Federal Reserve Bank of New York
... consistent with its dual mandate. Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of energy price declines and ...
... consistent with its dual mandate. Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of energy price declines and ...
AP Macroeconomics Study Guide
... The production possibilities curve represents the combinations of maximum output that can be reached in the economy. It is a frontier because it shows the limit of output. Anything under the curve is attainable, but involves inefficient use of resources. Anything outside the curve is unattainable wi ...
... The production possibilities curve represents the combinations of maximum output that can be reached in the economy. It is a frontier because it shows the limit of output. Anything under the curve is attainable, but involves inefficient use of resources. Anything outside the curve is unattainable wi ...
PowerPoint Presentation - University High School
... Suppose a consumer buys a frozen pizza at the grocery store at a price of $10. The frozen pizza company sold the pizza to the store for $5. The frozen pizza company purchased the pizza dough and tomato sauce from a food processing company at a price of $2 and bought the cheese from a dairy at a pri ...
... Suppose a consumer buys a frozen pizza at the grocery store at a price of $10. The frozen pizza company sold the pizza to the store for $5. The frozen pizza company purchased the pizza dough and tomato sauce from a food processing company at a price of $2 and bought the cheese from a dairy at a pri ...
SP14_2630_Study Guid..
... 1. What is the current economic situation in the U.S.? How bad was the Great Recession compared to the Great Depression and previous recessions? What economic indicators have rebounded since the Great Recession ended and what has not? Review the presentation titled “Today’s Economic Situation” which ...
... 1. What is the current economic situation in the U.S.? How bad was the Great Recession compared to the Great Depression and previous recessions? What economic indicators have rebounded since the Great Recession ended and what has not? Review the presentation titled “Today’s Economic Situation” which ...
A “HOW-TO” GUIDE: UNDERSTANDING AND MEASURING
... weighting placed on the prices of expensive restaurants, fine wine, or international luxury travel – but a CPI for very high-income consumers will include those factors. Some more specialized adjusted CPI indices are also reported in many countries. For example, central bankers are often interested ...
... weighting placed on the prices of expensive restaurants, fine wine, or international luxury travel – but a CPI for very high-income consumers will include those factors. Some more specialized adjusted CPI indices are also reported in many countries. For example, central bankers are often interested ...
Slides for Week 2
... exceeds the slope of the TC curve or MC, it pays for the firm to expand output and sales. The firm would be adding more to its total revenue than to its total costs and so its total profit would increase. To make it general, according to the marginal analysis as long as the marginal benefit of an ac ...
... exceeds the slope of the TC curve or MC, it pays for the firm to expand output and sales. The firm would be adding more to its total revenue than to its total costs and so its total profit would increase. To make it general, according to the marginal analysis as long as the marginal benefit of an ac ...
Nominal - Phoenix Union High School District
... Nominal (present) wage increase - inflation rate = Real wage increase When you earn money working your employer pays you a wage or salary stated in nominal terms. Your employer announces that everyone is receiving a 3% raise. The inflation rate is currently 1%. What kind of raise have you received i ...
... Nominal (present) wage increase - inflation rate = Real wage increase When you earn money working your employer pays you a wage or salary stated in nominal terms. Your employer announces that everyone is receiving a 3% raise. The inflation rate is currently 1%. What kind of raise have you received i ...
10th Edition Ch. 5
... lines in Figure 5-6 (b) correspond to successive snapshots of equation (1) Beginning with the horizontal black line at time t=0, at Y>Y*, price will be higher (AS shifting up) by t=1 ...
... lines in Figure 5-6 (b) correspond to successive snapshots of equation (1) Beginning with the horizontal black line at time t=0, at Y>Y*, price will be higher (AS shifting up) by t=1 ...
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.