Solutions to PSET 4 1. Why does the AS curve slope up, at least in
... curve is always vertical. What is this argument? The aggregate supply curve describes the relationship between the price level and the total quantity of output produced by firms. Because firms have market power (as in monopolistic competition) they may raise output and prices in response to an incre ...
... curve is always vertical. What is this argument? The aggregate supply curve describes the relationship between the price level and the total quantity of output produced by firms. Because firms have market power (as in monopolistic competition) they may raise output and prices in response to an incre ...
Presentaiton4 - GEOCITIES.ws
... increases Fed’s portfolio of such securities; paid for by creating reserve deposits ==> increases public’s deposit balances – Fed Funds rate: rate at which reserve deposits are lent between financial institutions; a marketdetermined rate – Purchase securities ==> adds to banking system reserves ==> ...
... increases Fed’s portfolio of such securities; paid for by creating reserve deposits ==> increases public’s deposit balances – Fed Funds rate: rate at which reserve deposits are lent between financial institutions; a marketdetermined rate – Purchase securities ==> adds to banking system reserves ==> ...
The Great Depression of Finland 1990-1993
... house prices fell by 50 percent – enormous negative wealth effect • GDP fell by 13 percent from mid 1990 to mid 1993 – mainly because of collapsing domestic demand (-20 %) ...
... house prices fell by 50 percent – enormous negative wealth effect • GDP fell by 13 percent from mid 1990 to mid 1993 – mainly because of collapsing domestic demand (-20 %) ...
Topic6 - Booth School of Business
... expected to pay a certain real rate and when inflation is higher and the nominal rate is fixed, the real rate they pay is lower (in terms of lost purchasing power). Key Insight: If the economy experiences unexpected deflation, the opposite happens-borrowers are paying more in terms of lost real purc ...
... expected to pay a certain real rate and when inflation is higher and the nominal rate is fixed, the real rate they pay is lower (in terms of lost purchasing power). Key Insight: If the economy experiences unexpected deflation, the opposite happens-borrowers are paying more in terms of lost real purc ...
Power Point - The University of Chicago Booth School of Business
... expected to pay a certain real rate and when inflation is higher and the nominal rate is fixed, the real rate they pay is lower (in terms of lost purchasing power). Key Insight: If the economy experiences unexpected deflation, the opposite happens-borrowers are paying more in terms of lost real purc ...
... expected to pay a certain real rate and when inflation is higher and the nominal rate is fixed, the real rate they pay is lower (in terms of lost purchasing power). Key Insight: If the economy experiences unexpected deflation, the opposite happens-borrowers are paying more in terms of lost real purc ...
syllabus
... to introduce to the principles of solving macroeconomic problems, interpretation and analysis of the stylised economic facts; to form ability in reading and understanding economic literature. Having completed this course the student is expected to have understood: the principle how the econom ...
... to introduce to the principles of solving macroeconomic problems, interpretation and analysis of the stylised economic facts; to form ability in reading and understanding economic literature. Having completed this course the student is expected to have understood: the principle how the econom ...
NBER WORKING PAPER SERIES LOST DECADE IN TRANSLATION:
... downturn became the beginning of its decade-long stagnation. And second, because the ...
... downturn became the beginning of its decade-long stagnation. And second, because the ...
Simultaneous equation systems in macroeconomic
... in the ‘Keynesian Cross’ model was exogenous, becomes an endogenous variable, since it depends on r which is now, itself, determined endogenously within the model. Thus whether a variable is endogenous or exogenous does not depend on what that variable is, rather it depends upon the nature of the mo ...
... in the ‘Keynesian Cross’ model was exogenous, becomes an endogenous variable, since it depends on r which is now, itself, determined endogenously within the model. Thus whether a variable is endogenous or exogenous does not depend on what that variable is, rather it depends upon the nature of the mo ...
Policy Balance
... This component has a special impact on productivity; so extraordinary arguments can be made for increasing investment tax credits or liberalizing depreciation guidelines for tax purposes. Changes in indirect taxes affect the price level directly and also affect some closely related demand functions. ...
... This component has a special impact on productivity; so extraordinary arguments can be made for increasing investment tax credits or liberalizing depreciation guidelines for tax purposes. Changes in indirect taxes affect the price level directly and also affect some closely related demand functions. ...
Unemployment and Inflation
... b. Teenagers have the highest rates. c. African-Americans have higher rates than whites. d. Rates for males and females are comparable, though females had a lower rate in 2002. e. Less educated workers, on average, have higher unemployment rates than workers with more education. f. “Long-term” (15 w ...
... b. Teenagers have the highest rates. c. African-Americans have higher rates than whites. d. Rates for males and females are comparable, though females had a lower rate in 2002. e. Less educated workers, on average, have higher unemployment rates than workers with more education. f. “Long-term” (15 w ...
The US Dollar is not as many observers state “backed by nothing”
... components would need to rise 10% or one component would have to rise 500%. If oil were to rise tomorrow to $400/bbl and all other 16 components did not change in price, the index would only rise by 10%. This means that the CCI is a stable indicator of price trends. What can be seen from figure 1 is ...
... components would need to rise 10% or one component would have to rise 500%. If oil were to rise tomorrow to $400/bbl and all other 16 components did not change in price, the index would only rise by 10%. This means that the CCI is a stable indicator of price trends. What can be seen from figure 1 is ...
BRAZIL`S 1998-1999 CURRENCY CRISIS
... government spending, and the Russian financial crisis, the conditions were in place for a balance of payments crisis. The data shows that Brazil suffered a drastic reduction in reserves as investors exchanged real for foreign currency. Capital flight reached $28 billion in 1998 following $10 billion ...
... government spending, and the Russian financial crisis, the conditions were in place for a balance of payments crisis. The data shows that Brazil suffered a drastic reduction in reserves as investors exchanged real for foreign currency. Capital flight reached $28 billion in 1998 following $10 billion ...
Inflation over 300 years
... the discount of sound short-term commercial paper—the so-called Real Bills Doctrine. The argument was, however, flawed because the Bank issued new notes by purchasing public bonds as well as by discounting commercial bills. In addition, trading problems with Latin America in 1810 and a domestic rece ...
... the discount of sound short-term commercial paper—the so-called Real Bills Doctrine. The argument was, however, flawed because the Bank issued new notes by purchasing public bonds as well as by discounting commercial bills. In addition, trading problems with Latin America in 1810 and a domestic rece ...
Globalisation and monetary policy - from virtue to vice?
... in goods, services and financial assets, complemented by improvements in information and technology transfer) as well as with the establishment of price stability-oriented monetary policy frameworks under independent central banks. In principle, each of these factors could help to account for improv ...
... in goods, services and financial assets, complemented by improvements in information and technology transfer) as well as with the establishment of price stability-oriented monetary policy frameworks under independent central banks. In principle, each of these factors could help to account for improv ...
consumer price index
... Old-age pensioners and those on fixed pensions will see their purchasing power being maintained and will be able to manage better. Savings in the economy may increase, leading to investment (if the rate of inflation is less than the rate of interest). Government revenues could increase with mo ...
... Old-age pensioners and those on fixed pensions will see their purchasing power being maintained and will be able to manage better. Savings in the economy may increase, leading to investment (if the rate of inflation is less than the rate of interest). Government revenues could increase with mo ...
Monetary Accounts: Analysis and Forecasting
... supply Money demand, like the demand for goods and services, depends on Income, i.e., GNP Price, i.e., the opportunity cost of holding money Inflation rate in developing countries Interest rate in industrial countries ...
... supply Money demand, like the demand for goods and services, depends on Income, i.e., GNP Price, i.e., the opportunity cost of holding money Inflation rate in developing countries Interest rate in industrial countries ...
ECO 120- Macroeconomics
... Demand for money • The higher is income and prices, the greater the amount of money required to make the purchases people will wish to make. • But a $1 in your pocket is a $1 not in the bank. In the bank, that $1 would be accumulating interest, but in your pocket, it accumulates no interest. So the ...
... Demand for money • The higher is income and prices, the greater the amount of money required to make the purchases people will wish to make. • But a $1 in your pocket is a $1 not in the bank. In the bank, that $1 would be accumulating interest, but in your pocket, it accumulates no interest. So the ...
Inflation
... The dollar was effectively abandoned as an official currency on 12 April 2009. Companies and individuals are permitted to transact domestic business in other currencies, such as the US dollar or the ...
... The dollar was effectively abandoned as an official currency on 12 April 2009. Companies and individuals are permitted to transact domestic business in other currencies, such as the US dollar or the ...
Introduntion - Hakan Berument`sHomepage
... possible especially just before elections or when there is a positive output gap. However, increasing spending increases interest rates. ...
... possible especially just before elections or when there is a positive output gap. However, increasing spending increases interest rates. ...
Converging on the Euro A genuine case of making the grade? 1 On
... to join the Euro in 1999 had made the Euro grade. How did the Commission reach its conclusions? The Maastricht Treaty of 1991 led to the setting up of the European Monetary Institute (EMI) (the forerunner of the European Central Bank), which quickly established the various criteria that had to be me ...
... to join the Euro in 1999 had made the Euro grade. How did the Commission reach its conclusions? The Maastricht Treaty of 1991 led to the setting up of the European Monetary Institute (EMI) (the forerunner of the European Central Bank), which quickly established the various criteria that had to be me ...
slides - Post-Keynesian Economics Study Group
... The fan chart depicts the probability of various outcomes for GDP growth. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £375 billion throughout the forecast period. To the left of the first vertical dashed li ...
... The fan chart depicts the probability of various outcomes for GDP growth. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £375 billion throughout the forecast period. To the left of the first vertical dashed li ...
Dear Mr
... Yet economists and policy makers are more interested in inflation, π, rather than the price level. In the last section of Chapter 15, we present a new model that determines equilibrium inflation and output in (Y, π)-space. With respect to aggregate demand, the change of variable from P to π is accom ...
... Yet economists and policy makers are more interested in inflation, π, rather than the price level. In the last section of Chapter 15, we present a new model that determines equilibrium inflation and output in (Y, π)-space. With respect to aggregate demand, the change of variable from P to π is accom ...
Monetary policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.Further goals of a monetary policy are usually to contribute to economic growth and stability, to lower unemployment, and to maintain predictable exchange rates with other currencies.Monetary economics provides insight into how to craft optimal monetary policy.Monetary policy is referred to as either being expansionary or contractionary, where an expansionary policy increases the total supply of money in the economy more rapidly than usual, and contractionary policy expands the money supply more slowly than usual or even shrinks it. Expansionary policy is traditionally used to try to combat unemployment in a recession by lowering interest rates in the hope that easy credit will entice businesses into expanding. Contractionary policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.Monetary policy differs from fiscal policy, which refers to taxation, government spending, and associated borrowing.