Answers to the sample exam
... expensive overseas and foreign imports become cheaper here. There are some possible detrimental internal effects: • Australian net exports will decline. • If the economy is at full employment, an appreciation of the exchange rate will lower NX and so shift the AD curve to the left. The economy will ...
... expensive overseas and foreign imports become cheaper here. There are some possible detrimental internal effects: • Australian net exports will decline. • If the economy is at full employment, an appreciation of the exchange rate will lower NX and so shift the AD curve to the left. The economy will ...
NOTES ON NOMINAL WAGES AND EMPLOYMENT Paul Krugman
... Well, in normal times the AD curve slopes down, we think, because other things equal a higher price level increases the demand for money, which drives up interest rates, which reduces desired spending. (In terms of IS-LM analysis, higher P leads to lower M/P which shifts LM left.) But in liquidity t ...
... Well, in normal times the AD curve slopes down, we think, because other things equal a higher price level increases the demand for money, which drives up interest rates, which reduces desired spending. (In terms of IS-LM analysis, higher P leads to lower M/P which shifts LM left.) But in liquidity t ...
Macroeconomics
... Attendance: Three-strike policy - absence from more than 25 percent of the classes for each semester results in automatic failure. If you arrive late to the class, it is your responsibility to let me know at the end of class so that I can check off your name. Participation: Your quality participatio ...
... Attendance: Three-strike policy - absence from more than 25 percent of the classes for each semester results in automatic failure. If you arrive late to the class, it is your responsibility to let me know at the end of class so that I can check off your name. Participation: Your quality participatio ...
Macroeconomics Key Graphs
... rightward. These combined shifts show growth – increase in Real GDP to Q2 accompanied by some inflation to ...
... rightward. These combined shifts show growth – increase in Real GDP to Q2 accompanied by some inflation to ...
Answer Key Section 5 and 6 practice test
... C) sales tax revenues and income security D) sales tax rates and income security 14. Which of the following policies do supply-side economists believe is the best for increasing the standard of living? A) redistributing income from the wealthy to the poor B) raising taxes to support government publi ...
... C) sales tax revenues and income security D) sales tax rates and income security 14. Which of the following policies do supply-side economists believe is the best for increasing the standard of living? A) redistributing income from the wealthy to the poor B) raising taxes to support government publi ...
final exam sample from s2005
... A. decrease the effectiveness of both monetary and fiscal policy. B. increase the effectiveness of both monetary and fiscal policy. C. increase the effectiveness of fiscal policy, but decrease the effectiveness of monetary policy. D. have no impact on the effectiveness of either monetary or fiscal p ...
... A. decrease the effectiveness of both monetary and fiscal policy. B. increase the effectiveness of both monetary and fiscal policy. C. increase the effectiveness of fiscal policy, but decrease the effectiveness of monetary policy. D. have no impact on the effectiveness of either monetary or fiscal p ...
Macro1 Exercise #5 Answers
... (Yes, No). Given these results, should the interest rate be decreased to a greater degree, to a lesser degree or not changed at all? The interest rate should be decreased to a greater degree. Click “Reset Policy” and enter a new interest rate of 5.2%. Click “Continue”. Fill in the amounts below for ...
... (Yes, No). Given these results, should the interest rate be decreased to a greater degree, to a lesser degree or not changed at all? The interest rate should be decreased to a greater degree. Click “Reset Policy” and enter a new interest rate of 5.2%. Click “Continue”. Fill in the amounts below for ...
Chapter 8
... output as measured by real GRP and the price level Long run – vertical curve – Economy will produce at full employment no matter the price level – Full employment output – the real GDP the economy produces when it fully employs its resources. ...
... output as measured by real GRP and the price level Long run – vertical curve – Economy will produce at full employment no matter the price level – Full employment output – the real GDP the economy produces when it fully employs its resources. ...
Inflation Targeting
... – from 2 to 3%; New Zeland – from 1 to 3%; RPA – from 3 to 6%) • Asymetric targets (Switzerland – always below 2%; EBC in €uro Area – below 2%, but close to this level) ...
... – from 2 to 3%; New Zeland – from 1 to 3%; RPA – from 3 to 6%) • Asymetric targets (Switzerland – always below 2%; EBC in €uro Area – below 2%, but close to this level) ...
EconCh13 - Rogers High School
... Cost-push inflation can lead to a wage-price spiral — the process by which rising wages cause higher prices, and higher prices cause higher wages. ...
... Cost-push inflation can lead to a wage-price spiral — the process by which rising wages cause higher prices, and higher prices cause higher wages. ...
Presentation
... Lack of lots, gun shy lenders, high prices, rising rates, SF gets better slowly ...
... Lack of lots, gun shy lenders, high prices, rising rates, SF gets better slowly ...
lecture notes chapter 16
... determinant of investment spending is the expected after-tax return. 3. Lower marginal tax rates may encourage more people to enter the labor force and to work longer. The lower rates should reduce periods of unemployment and raise capital investment, which increases worker productivity. Aggregate s ...
... determinant of investment spending is the expected after-tax return. 3. Lower marginal tax rates may encourage more people to enter the labor force and to work longer. The lower rates should reduce periods of unemployment and raise capital investment, which increases worker productivity. Aggregate s ...
2.2.
... When borrowing by consumers, businesses, and government increases, interest rates are likely to rise. See assignment in G:drive (Banks) ...
... When borrowing by consumers, businesses, and government increases, interest rates are likely to rise. See assignment in G:drive (Banks) ...
Ch6
... Cyclical unemployment Frictional unemployment Seasonal unemployment Structural unemployment Natural unemployement rate Labor force participation rate ...
... Cyclical unemployment Frictional unemployment Seasonal unemployment Structural unemployment Natural unemployement rate Labor force participation rate ...
aggregate demand and
... The LRAS curve The long run is defined as that period in which nominal wages, or prices of other inputs, can change. The shape of the LRAS depends on the assumption about how workers react to unemployment. Classical or supply side economists see the labour market as functioning perfectly. If there i ...
... The LRAS curve The long run is defined as that period in which nominal wages, or prices of other inputs, can change. The shape of the LRAS depends on the assumption about how workers react to unemployment. Classical or supply side economists see the labour market as functioning perfectly. If there i ...
Homework #3
... your name, TA name and section number on top of the homework (legibly). Make sure you write your name as it appears on your ID so that you can receive the correct grade. Please remember the section number for the section you are registered, because you will need that number when you submit exams and ...
... your name, TA name and section number on top of the homework (legibly). Make sure you write your name as it appears on your ID so that you can receive the correct grade. Please remember the section number for the section you are registered, because you will need that number when you submit exams and ...
inflation.
... production level which are early indicators of inflation. The 2,800 items include prices for raw ...
... production level which are early indicators of inflation. The 2,800 items include prices for raw ...
the neoclassical tradition
... Price stability is the primary objective of monetary policy; Monetary policy works through interest rate policy, not money supply rules (abandoned in the 80s). Price stability can be achieved through monetary policy since inflation is a monetary phenomenon; as such it can only be controlled through ...
... Price stability is the primary objective of monetary policy; Monetary policy works through interest rate policy, not money supply rules (abandoned in the 80s). Price stability can be achieved through monetary policy since inflation is a monetary phenomenon; as such it can only be controlled through ...
The Root Beer Game Debrief
... •The government has the responsibility to: • Promote long-term growth. • Prevent unemployment (resulting from a bust). • Prevent inflation (resulting form a boom). ...
... •The government has the responsibility to: • Promote long-term growth. • Prevent unemployment (resulting from a bust). • Prevent inflation (resulting form a boom). ...
The Root Beer Game Debrief
... •The government has the responsibility to: • Promote long-term growth. • Prevent unemployment (resulting from a bust). • Prevent inflation (resulting from a boom). ...
... •The government has the responsibility to: • Promote long-term growth. • Prevent unemployment (resulting from a bust). • Prevent inflation (resulting from a boom). ...
ADAS3
... rise even in the face of labor shortages. Nominal wages cannot be sticky forever. The length of their stickyness is the difference in the short and long run ...
... rise even in the face of labor shortages. Nominal wages cannot be sticky forever. The length of their stickyness is the difference in the short and long run ...
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.