Lecture Notes Chapter 8
... 2. Aggregate Supply (AS) In the long run, AS is ________________ because the total amount of final goods and services that a country can produce depends on the availability of resources, not on the price level. When an economy uses all the resources and uses them efficiently to produce the maxim ...
... 2. Aggregate Supply (AS) In the long run, AS is ________________ because the total amount of final goods and services that a country can produce depends on the availability of resources, not on the price level. When an economy uses all the resources and uses them efficiently to produce the maxim ...
Chapter 5 Introduction to Macroeconomics
... A) at the going wage rate, there are people who want to work but cannot find work. B) people are not willing to work at the going wage rate. C) there are some people who will not work at the going wage rate. D) there is excess demand in the labor market. 15) The unemployment rate equals A) labor for ...
... A) at the going wage rate, there are people who want to work but cannot find work. B) people are not willing to work at the going wage rate. C) there are some people who will not work at the going wage rate. D) there is excess demand in the labor market. 15) The unemployment rate equals A) labor for ...
Measuring Health, Unemployment, Inflation
... when inflation rates change greatly from year to year. Purchasing Power In an inflationary economy, a dollar loses value. It will not buy the same amount of goods that it did in years past. Interest Rates When a bank's interest rate matches the inflation rate, savers break even. When a bank's in ...
... when inflation rates change greatly from year to year. Purchasing Power In an inflationary economy, a dollar loses value. It will not buy the same amount of goods that it did in years past. Interest Rates When a bank's interest rate matches the inflation rate, savers break even. When a bank's in ...
Output Gaps: Uses and Limitations
... (See Did Oil Prices Cause the Inflation in the 1970s?) Friedman defined a baseline value for employment in his theory and thus postulated employment gaps as we know them today. The so-called natural rate of unemployment is the rate we would observe if inflation were exactly as expected. This definit ...
... (See Did Oil Prices Cause the Inflation in the 1970s?) Friedman defined a baseline value for employment in his theory and thus postulated employment gaps as we know them today. The so-called natural rate of unemployment is the rate we would observe if inflation were exactly as expected. This definit ...
new classical vs keynesian viewpoint
... Keynes argued that as there is nothing inherent in the economy to move the SR into the LR, then SRAS = LRAS ...
... Keynes argued that as there is nothing inherent in the economy to move the SR into the LR, then SRAS = LRAS ...
Monetary policy review powerpoint
... Draw a graph of the money market showing an increase in the money supply Name 3 things the FED can do to increase the money supply. When would the FED use this strategy? What are the 2 names for this policy? ...
... Draw a graph of the money market showing an increase in the money supply Name 3 things the FED can do to increase the money supply. When would the FED use this strategy? What are the 2 names for this policy? ...
UNIT 9 : Economics
... When large numbers of people have no work there are bound to be social problems. If there is a high level of youth unemployment, it may result in a dependency culture that is hard to escape. Civil disorder and criminal activity are likely to increase. The costs to society are great in money terms an ...
... When large numbers of people have no work there are bound to be social problems. If there is a high level of youth unemployment, it may result in a dependency culture that is hard to escape. Civil disorder and criminal activity are likely to increase. The costs to society are great in money terms an ...
Chapter 16
... Some economists believe that if the central bank makes a credible statement of its intention to deflate, that lower rates of inflation can be obtained at smaller cost. PE adjusts faster. In 1988, the Bank of Canada announced its zero-inflation target, and in 1989 monetary contraction began The targe ...
... Some economists believe that if the central bank makes a credible statement of its intention to deflate, that lower rates of inflation can be obtained at smaller cost. PE adjusts faster. In 1988, the Bank of Canada announced its zero-inflation target, and in 1989 monetary contraction began The targe ...
FedViews
... market is buoyant. In addition, monetary policy remains highly accommodative. In light of these conditions, we expect real GDP growth to move above its trend rate of 2% during the remainder of 2015. Absent other forces, and with employment and inflation at or near mandate levels, we expect the econo ...
... market is buoyant. In addition, monetary policy remains highly accommodative. In light of these conditions, we expect real GDP growth to move above its trend rate of 2% during the remainder of 2015. Absent other forces, and with employment and inflation at or near mandate levels, we expect the econo ...
Chapter 35 Key Question Solutions
... be much lower than it actually is, and thus undertakes expansionary fiscal and monetary policy to try to achieve the lower rate. Use the concept of the short-run Phillips Curve to explain why these policies might at first succeed. Use the concept of the long-run Phillips Curve to explain the long-ru ...
... be much lower than it actually is, and thus undertakes expansionary fiscal and monetary policy to try to achieve the lower rate. Use the concept of the short-run Phillips Curve to explain why these policies might at first succeed. Use the concept of the long-run Phillips Curve to explain the long-ru ...
Statistics/Data - Dana Investment Advisors
... Mark Twain popularized the phrase: “There are three kinds of lies: lies, damned lies, and statistics.” Every day there are hundreds of statistics and pieces of data relating to the economy that are released by governments and corporations around the world. Economists and analysts pore through these ...
... Mark Twain popularized the phrase: “There are three kinds of lies: lies, damned lies, and statistics.” Every day there are hundreds of statistics and pieces of data relating to the economy that are released by governments and corporations around the world. Economists and analysts pore through these ...
APMac2 - nrapmacro
... PPC analysis of Macroeconomic goals: The simple production possibilities curve can be used to illustrate three of the economic goals ...
... PPC analysis of Macroeconomic goals: The simple production possibilities curve can be used to illustrate three of the economic goals ...
Due Date: Friday, September 17th
... b) What happens to the level of output and the price level in the short run and in the long run? In the short run, we assume that the price level is fixed and that the aggregate supply curve is flat. In the short run, output falls but the price level doesn’t change. In the long-run, prices are flexi ...
... b) What happens to the level of output and the price level in the short run and in the long run? In the short run, we assume that the price level is fixed and that the aggregate supply curve is flat. In the short run, output falls but the price level doesn’t change. In the long-run, prices are flexi ...
5.1 - Government Economic Policy
... support agriculture and key industries to provide jobs and output, and to invest in staff training, new machinery, and the research and development (R&D) of new products manage the economy, for example to boost total spending during an economic recession to help firms and reduce unemployment reduce ...
... support agriculture and key industries to provide jobs and output, and to invest in staff training, new machinery, and the research and development (R&D) of new products manage the economy, for example to boost total spending during an economic recession to help firms and reduce unemployment reduce ...
Bank of England Inflation Report May 2014 Output and supply
... Sources: BCC, CBI, CBI/PwC, Markit Economics, ONS and Bank calculations. (a) Chained-volume measures. GDP is at market prices. The magenta diamond shows Bank staff’s central projection for the preliminary estimate of GDP growth for Q1 at the time of the February Report. The green diamond shows the c ...
... Sources: BCC, CBI, CBI/PwC, Markit Economics, ONS and Bank calculations. (a) Chained-volume measures. GDP is at market prices. The magenta diamond shows Bank staff’s central projection for the preliminary estimate of GDP growth for Q1 at the time of the February Report. The green diamond shows the c ...
(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. ...
Chapter 11: Unemployment and Inflation
... Excess unemployment means the economy is no longer producing at its potential, i.e., some of society’s resources are being wasted; Lower employment translates into reduced income and immediate hardship for individuals, especially those with fixed obligations; ...
... Excess unemployment means the economy is no longer producing at its potential, i.e., some of society’s resources are being wasted; Lower employment translates into reduced income and immediate hardship for individuals, especially those with fixed obligations; ...
Long-Run and Short-Run Concerns: Growth, Productivity
... price levels. The price index that pertains to all goods and services in the economy is the GDP price index. • The consumer price index (CPI) is a price index computed each month by the Turkish Institute of Statistics using a bundle that is meant to represent the “market basket” purchased monthly by ...
... price levels. The price index that pertains to all goods and services in the economy is the GDP price index. • The consumer price index (CPI) is a price index computed each month by the Turkish Institute of Statistics using a bundle that is meant to represent the “market basket” purchased monthly by ...
Economic Issues In The Australian Economy
... structural or hardcore and there is no cyclical unemployment. At full employment, the unemployment rate is called the natural rate of unemployment. At the natural unemployment rate there should be a non-accelerating inflation rate: that is, the inflation rate should not increase. Main groups affecte ...
... structural or hardcore and there is no cyclical unemployment. At full employment, the unemployment rate is called the natural rate of unemployment. At the natural unemployment rate there should be a non-accelerating inflation rate: that is, the inflation rate should not increase. Main groups affecte ...
PS2 solution
... oil shock, then things get interesting. Now, the rise in inflation turns a constant nominal rate into a cut in the real rate; the MP curve moves down. The central bank has just unwittingly created a boom. With positive short-run output, inflation rises persistently, year after year, as long as the ...
... oil shock, then things get interesting. Now, the rise in inflation turns a constant nominal rate into a cut in the real rate; the MP curve moves down. The central bank has just unwittingly created a boom. With positive short-run output, inflation rises persistently, year after year, as long as the ...
SRAS 2
... The Phillips Curve The Phillips Curve: The Trade-Off? A curve showing the apparent relationship between unemployment and changes in wages or prices. It was long thought to reflect a trade-off between unemployment and inflation. ...
... The Phillips Curve The Phillips Curve: The Trade-Off? A curve showing the apparent relationship between unemployment and changes in wages or prices. It was long thought to reflect a trade-off between unemployment and inflation. ...
What We Hope To Accomplish
... “The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measu ...
... “The gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measu ...
Full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment. It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0%. The discrepancy from 0% arises due to non-cyclical types of unemployment, such as frictional unemployment (there will always be people who have quit or have lost a seasonal job and are in the process of getting a new job) and structural unemployment (mismatch between worker skills and job requirements). Unemployment above 0% is seen as necessary to control inflation in capitalist economies, to keep inflation from accelerating, i.e., from rising from year to year. This view is based on a theory centering on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU); in the current era, the majority of mainstream economists mean NAIRU when speaking of ""full"" employment. The NAIRU has also been described by Milton Friedman, among others, as the ""natural"" rate of unemployment. Having many names, it has also been called the structural unemployment rate.The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. Recently, economists have emphasized the idea that full employment represents a ""range"" of possible unemployment rates. For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the ""full-employment unemployment rate"" of 4 to 6.4%. This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve. In neoclassical macroeconomics, the highest sustainable level of aggregate real GDP or ""potential"" is seen as corresponding to a vertical LRAS curve: any increase in the demand for real GDP can only lead to rising prices in the long run, while any increase in output is temporary.