Aggregate Supply in the Short and Long Run
... A higher price level results in higher nominal wages and thus shifts the short-run aggregate supply to the left. The result is higher prices, but a return to the original level of output. ...
... A higher price level results in higher nominal wages and thus shifts the short-run aggregate supply to the left. The result is higher prices, but a return to the original level of output. ...
Macroeconomics
... The labor force is comprised of people that are currently employed and those that are unemployed. Types of Unemployment: -Frictional (Between jobs) -Structural (Skills no longer needed) -Cyclical (Due to recession) ...
... The labor force is comprised of people that are currently employed and those that are unemployed. Types of Unemployment: -Frictional (Between jobs) -Structural (Skills no longer needed) -Cyclical (Due to recession) ...
Weekly Market Update - O`Meara Financial Group
... graph showing the interest rate on various government securities from the shortest maturity date to the longest. Today, we have a rising or “steep” yield curve, which means short-term interest rates are lower than longer-term rates. In other words, the graph of these rates slopes upward to the right ...
... graph showing the interest rate on various government securities from the shortest maturity date to the longest. Today, we have a rising or “steep” yield curve, which means short-term interest rates are lower than longer-term rates. In other words, the graph of these rates slopes upward to the right ...
Fall 2014 Economic Rulers
... -- there is an increase in the price level (a.k.a. inflation) -- ex: GDP is currently raising in the US, some economists think this is due to rise in price of oil. ...
... -- there is an increase in the price level (a.k.a. inflation) -- ex: GDP is currently raising in the US, some economists think this is due to rise in price of oil. ...
14.02 Principles of Macroeconomics Problem Set 1 *Solution*
... the unemployment rate & the CHANGE in inflation (When the unemployment rate is low, inflation tends to increase.) (We will revisit the Phillips Curve in chapter 8 again.) 4. Inflation is bad for the economy because goods and services are more expensive. Uncertain. (page 33) Inflation usually leads t ...
... the unemployment rate & the CHANGE in inflation (When the unemployment rate is low, inflation tends to increase.) (We will revisit the Phillips Curve in chapter 8 again.) 4. Inflation is bad for the economy because goods and services are more expensive. Uncertain. (page 33) Inflation usually leads t ...
Objective: • What are the different types of unemployment?
... cost-push inflation occurs theory, inflation when demand for occurs when goods and producers raise services exceeds prices in order existing supplies. to meet increased costs. ...
... cost-push inflation occurs theory, inflation when demand for occurs when goods and producers raise services exceeds prices in order existing supplies. to meet increased costs. ...
Econ 102 Taskin Week of 20 February 2012
... initial equilibrium how have the values for each of the following variables, real GDP, the price level, the unemployment rate, changed? b. Assume that there is a sharp increase in the oil price level due to the political upheaval in the Middle East region. Show the short-run equilibrium, and indicat ...
... initial equilibrium how have the values for each of the following variables, real GDP, the price level, the unemployment rate, changed? b. Assume that there is a sharp increase in the oil price level due to the political upheaval in the Middle East region. Show the short-run equilibrium, and indicat ...
inflation - nagleeco-2009
... productive assets rather than just short term speculative investments, which a higher inflation environment encourages. As a result, lower inflation is likely to encourage consumers to save a higher proportion of their disposable income. Low inflation should improve Australia’s international competi ...
... productive assets rather than just short term speculative investments, which a higher inflation environment encourages. As a result, lower inflation is likely to encourage consumers to save a higher proportion of their disposable income. Low inflation should improve Australia’s international competi ...
PPT
... people aged 16 years and older who are not in jail, hospital, or some other institution 2. People too young to work (under 16 years of age) or in institutional care ...
... people aged 16 years and older who are not in jail, hospital, or some other institution 2. People too young to work (under 16 years of age) or in institutional care ...
AS - AD - Illinois State University
... • Labor Market interpretation – u* > u n – as Pe falls, wages bid down – lower cost to production – AS shifts right • Medium run Y* = Yn ...
... • Labor Market interpretation – u* > u n – as Pe falls, wages bid down – lower cost to production – AS shifts right • Medium run Y* = Yn ...
Taylor Rules and Potential Output
... ante and other domestic and foreign firms that set their prices so as to clear the markets ex post. This market-organization feature determines in turn the degree of price stickiness. ...
... ante and other domestic and foreign firms that set their prices so as to clear the markets ex post. This market-organization feature determines in turn the degree of price stickiness. ...
1 - Weber State University
... C) Actual real GDP is at a desirable level if there is no tendency for inflation to accelerate or decelerate. D) All of the above. Answer: D 20) The output gap is zero when A) Actual real GDP > Natural real GDP. B) Actual real GDP = Natural real GDP. C) Actual real GDP < Natural real GDP. D) Natural ...
... C) Actual real GDP is at a desirable level if there is no tendency for inflation to accelerate or decelerate. D) All of the above. Answer: D 20) The output gap is zero when A) Actual real GDP > Natural real GDP. B) Actual real GDP = Natural real GDP. C) Actual real GDP < Natural real GDP. D) Natural ...
Chapter23
... a) A horizontal AS curve reflects the fact that firms are prepared to supply any amount of output that is demanded of them without requiring an increase in prices. There are two situations that might lead to this “passive” supply response. The first is when the economy has many unemployed resources, ...
... a) A horizontal AS curve reflects the fact that firms are prepared to supply any amount of output that is demanded of them without requiring an increase in prices. There are two situations that might lead to this “passive” supply response. The first is when the economy has many unemployed resources, ...
KEY - Personal.psu.edu
... research and development, infrastructure spending — things that can have an effect in the long run on productivity. Short run, we’re in a good shape. The critical issue for our country are these longer-term issues, getting our workers to get the skills, training and preparation to have success in th ...
... research and development, infrastructure spending — things that can have an effect in the long run on productivity. Short run, we’re in a good shape. The critical issue for our country are these longer-term issues, getting our workers to get the skills, training and preparation to have success in th ...
Presentation to The Forecasters Club New York, New York
... more willing to purchase and hold longer-term securities. That, of course, increases their prices and reduces their yields. To give you a sense of the impact of this tool, the unexpected extension of our forward guidance in August 2011 lowered yields on longer-term Treasury securities by about 0.2 p ...
... more willing to purchase and hold longer-term securities. That, of course, increases their prices and reduces their yields. To give you a sense of the impact of this tool, the unexpected extension of our forward guidance in August 2011 lowered yields on longer-term Treasury securities by about 0.2 p ...
Exam - Version A
... A) It would decrease, as social security tax revenues decrease. B) It would decrease, as estate and excise taxes decrease. C) It would increase, as social security payments increase. D) It would increase, as corporate tax revenues increase. ...
... A) It would decrease, as social security tax revenues decrease. B) It would decrease, as estate and excise taxes decrease. C) It would increase, as social security payments increase. D) It would increase, as corporate tax revenues increase. ...
Chapter 23 - Inflation
... The CPI does also does not take full account of – consumer differences, since it is based on the consumption patterns of an average household – changes in spending patterns since it uses base-year quantities – improvements in product quality ...
... The CPI does also does not take full account of – consumer differences, since it is based on the consumption patterns of an average household – changes in spending patterns since it uses base-year quantities – improvements in product quality ...
Principles of Economics, Case and Fair,8e
... the labor market is consistent with the view that wages respond quickly to price changes. This means that the AS curve is vertical. When the AS curve is vertical, monetary and fiscal policy cannot affect the level of output and employment in the economy. ...
... the labor market is consistent with the view that wages respond quickly to price changes. This means that the AS curve is vertical. When the AS curve is vertical, monetary and fiscal policy cannot affect the level of output and employment in the economy. ...
FedViews
... The views expressed are those of the author, with input from the forecasting staff of the Federal Reserve Bank of San Francisco. They are not intended to represent the views of others within the Bank or within the Federal Reserve System. FedViews generally appears around the middle of the month. The ...
... The views expressed are those of the author, with input from the forecasting staff of the Federal Reserve Bank of San Francisco. They are not intended to represent the views of others within the Bank or within the Federal Reserve System. FedViews generally appears around the middle of the month. The ...
a. Depositors become concerned about the safety of depository
... the natural rate of unemployment is higher and acts to bring the economy back to its supposed potential, it will decrease the money supply. This will cause the interest rate to rise from r1 to r2, causing the AD curve to shift leftward from AD1 to AD2. The economy will experience a lower price level ...
... the natural rate of unemployment is higher and acts to bring the economy back to its supposed potential, it will decrease the money supply. This will cause the interest rate to rise from r1 to r2, causing the AD curve to shift leftward from AD1 to AD2. The economy will experience a lower price level ...
Keynesian vs. monetarist/new classical view
... Monetarist/new classical model of LRAS Alternative views of aggregate supply ...
... Monetarist/new classical model of LRAS Alternative views of aggregate supply ...
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.