(AS) Curve
... Wages are a large fraction of total costs and wage changes lag behind price changes. This gives us an upward sloping short-run AS curve. ...
... Wages are a large fraction of total costs and wage changes lag behind price changes. This gives us an upward sloping short-run AS curve. ...
Chapter 21 - The influence of monetary and fiscal policy on aggregate demand
... Panel (a) shows the money market. When the government increases its purchases of goods and services, the resulting increase in income raises the demand for money from MD1 to MD2, and this causes the equilibrium interest rate to rise from r1 to r2. Panel (b) shows the effects on aggregate demand. The ...
... Panel (a) shows the money market. When the government increases its purchases of goods and services, the resulting increase in income raises the demand for money from MD1 to MD2, and this causes the equilibrium interest rate to rise from r1 to r2. Panel (b) shows the effects on aggregate demand. The ...
File
... Savers are hurt when unexpected inflation _reduces___ returns on investment. If inflation is expected, then savers will be compensated with higher rates of return, which offsets the inflation effect. The higher rate reflects an inflation ...
... Savers are hurt when unexpected inflation _reduces___ returns on investment. If inflation is expected, then savers will be compensated with higher rates of return, which offsets the inflation effect. The higher rate reflects an inflation ...
M-P
... rates by their willingness to supply whatever money is demanded at a particular rate. Through the term structure of interest rates, long-term rates are an average of current and expected future short-term rates. This structure allows changes in short-term rates to affect long-term rates. ...
... rates by their willingness to supply whatever money is demanded at a particular rate. Through the term structure of interest rates, long-term rates are an average of current and expected future short-term rates. This structure allows changes in short-term rates to affect long-term rates. ...
FRBSF E L
... debt overhang forces borrowers to repair their balance sheets via reduced spending or default. Borrowers have too much debt, so monetary policy actions designed to encourage more borrowing by lowering interest rates are less effective. Balance-sheet recessions are typically followed by sluggish reco ...
... debt overhang forces borrowers to repair their balance sheets via reduced spending or default. Borrowers have too much debt, so monetary policy actions designed to encourage more borrowing by lowering interest rates are less effective. Balance-sheet recessions are typically followed by sluggish reco ...
Behavior of Interest Rates
... • Occurs at a price P where the amount of bonds Bd that people are willing to buy (demand) equals the amount Bs that people are willing to sell (supply). • If P is such that Bd = Bs, then P is called a market equilibrium (or market clearing) bond price. price • If P is such that Bd > Bs (excess dema ...
... • Occurs at a price P where the amount of bonds Bd that people are willing to buy (demand) equals the amount Bs that people are willing to sell (supply). • If P is such that Bd = Bs, then P is called a market equilibrium (or market clearing) bond price. price • If P is such that Bd > Bs (excess dema ...
Economics Section 7
... they were not employed during the survey week, but were available for work and had made a specific effort to find a job at the same time within the preceding four weeks, or if they were waiting either to report to a new job within 30 days or be recalled to a job from which they were ...
... they were not employed during the survey week, but were available for work and had made a specific effort to find a job at the same time within the preceding four weeks, or if they were waiting either to report to a new job within 30 days or be recalled to a job from which they were ...
The Federal Budget
... The use of discretionary fiscal policy is seriously hampered by three time lags: Recognition lag—the time it takes to figure out that fiscal policy action is needed. Law-making lag—the time it takes Congress to pass the laws needed to change taxes or spending. Impact lag—the time it takes from ...
... The use of discretionary fiscal policy is seriously hampered by three time lags: Recognition lag—the time it takes to figure out that fiscal policy action is needed. Law-making lag—the time it takes Congress to pass the laws needed to change taxes or spending. Impact lag—the time it takes from ...
01pr - Eco 101
... have to reduce the production of goods/cars are if they are going to grow. 2pts each Right now Batavia is already producing 60 units of machines & guns on the production possibility frontier. 2a. How many consumer goods/cars are they also producing right now? 2b. If Batavia increase the production o ...
... have to reduce the production of goods/cars are if they are going to grow. 2pts each Right now Batavia is already producing 60 units of machines & guns on the production possibility frontier. 2a. How many consumer goods/cars are they also producing right now? 2b. If Batavia increase the production o ...
Financial versus real economic variables in explaining growth and
... The main purpose of this study is to examine the relationship between the real output and the real financial-economic variables in the U.S. economy and whether the financial sector or the real economy can better explain growth and cycles. In order to investigate this, various econometric techniques ...
... The main purpose of this study is to examine the relationship between the real output and the real financial-economic variables in the U.S. economy and whether the financial sector or the real economy can better explain growth and cycles. In order to investigate this, various econometric techniques ...
Accelerator
... recession, investment can rise very rapidly. When the growth of the economy slows down, however, investment can fall dramatically, and during a recession can all but disappear. • Since investment is an injection into the circular flow of income, these changes in investment wil cause multiplied chang ...
... recession, investment can rise very rapidly. When the growth of the economy slows down, however, investment can fall dramatically, and during a recession can all but disappear. • Since investment is an injection into the circular flow of income, these changes in investment wil cause multiplied chang ...
Chapter 29: LECTURE NOTES
... borrowing more accessible to low-income borrowers. However, Figure 29-2 demonstrates several problems with usury laws. 1. There will be a shortage of credit if the usury rate is below the market rate. Riskier borrowers may be excluded from borrowing from established financial institutions. 2. Credit ...
... borrowing more accessible to low-income borrowers. However, Figure 29-2 demonstrates several problems with usury laws. 1. There will be a shortage of credit if the usury rate is below the market rate. Riskier borrowers may be excluded from borrowing from established financial institutions. 2. Credit ...
new
... – About 2.5% per year from 1949 to 1973 – 1.1% per year from 1973 to 1995 – 2.0% per year from 1995 to 2005 • In analyzing macroeconomic data during the past year, you have discovered that average labor productivity fell, but total output increased. What was most likely to have caused this? A) There ...
... – About 2.5% per year from 1949 to 1973 – 1.1% per year from 1973 to 1995 – 2.0% per year from 1995 to 2005 • In analyzing macroeconomic data during the past year, you have discovered that average labor productivity fell, but total output increased. What was most likely to have caused this? A) There ...
Chapter 5
... A. The business cycle is the periodic but irregular up-and-down movement in production and jobs. 1. The NBER defines the phases – recession and expansion – and turning points – peak and trough – of the cycle. 2. Its Business Cycle Dating Committee identifies and dates them for the United States. B. ...
... A. The business cycle is the periodic but irregular up-and-down movement in production and jobs. 1. The NBER defines the phases – recession and expansion – and turning points – peak and trough – of the cycle. 2. Its Business Cycle Dating Committee identifies and dates them for the United States. B. ...
Practice Set 1
... A. An economy-wide decrease in commodity prices. B. An increase in nominal wages. C. A decrease in productivity. D. A decrease in government purchases of goods and services. E. A decrease in personal income taxes. ...
... A. An economy-wide decrease in commodity prices. B. An increase in nominal wages. C. A decrease in productivity. D. A decrease in government purchases of goods and services. E. A decrease in personal income taxes. ...
... The charts show actual values and projections for three economic variables: Change in Real Gross Domestic Product (GDP)—as measured from the fourth quarter of the previous year to the fourth quarter of the year indicated, with values plotted at the end of each year. Unemployment Rate—the average ...
