lesson 1
... increase in interest rates. When the government borrows money to finance its deficit, this results in an increase in the demand for money, or, alternatively, the demand for loanable funds. This in turn results in an increase in the interest rate. A higher interest rate causes decreases in investment ...
... increase in interest rates. When the government borrows money to finance its deficit, this results in an increase in the demand for money, or, alternatively, the demand for loanable funds. This in turn results in an increase in the interest rate. A higher interest rate causes decreases in investment ...
Chapter 5 - Michigan Open Book Project
... because after the government fulfills it legal obligations, only about ⅓ of the available funds are left to be spent. Mandatory spending is the term used to describe the money that Congress is required by law to spend on certain programs or to use for interest payments on the national debt. The ma ...
... because after the government fulfills it legal obligations, only about ⅓ of the available funds are left to be spent. Mandatory spending is the term used to describe the money that Congress is required by law to spend on certain programs or to use for interest payments on the national debt. The ma ...
In the compilation of monetary statistics, the two broad approaches
... the monetary characteristics of instruments approach where instruments that exhibit money-like characteristics are included in the money supply. The institutions that issue the instruments are not the defining characteristics of the money supply in this case. Singapore's monetary aggregates are comp ...
... the monetary characteristics of instruments approach where instruments that exhibit money-like characteristics are included in the money supply. The institutions that issue the instruments are not the defining characteristics of the money supply in this case. Singapore's monetary aggregates are comp ...
Federal Reserve
... PPI measures changes in prices that manufacturers and wholesales pay for goods during various stages of production. It is the oldest inflation measure; index began in 1902. Labor department issues questionnaires to 30,000 firms on 100,000 different items. A basket of goods is formed to create an ind ...
... PPI measures changes in prices that manufacturers and wholesales pay for goods during various stages of production. It is the oldest inflation measure; index began in 1902. Labor department issues questionnaires to 30,000 firms on 100,000 different items. A basket of goods is formed to create an ind ...
LarrySummers Central Bank of Chile
... years in the oil industry. If you asked people at what price shale oil would be economic, the answer was a constant. It was the current price of oil plus $10, and something of that kind has been the reality with respect to forecasts of an acceleration of growth. ...
... years in the oil industry. If you asked people at what price shale oil would be economic, the answer was a constant. It was the current price of oil plus $10, and something of that kind has been the reality with respect to forecasts of an acceleration of growth. ...
Finance - Department of Agricultural Economics
... Real Net Farm Income, having been adjusted for inflation, reflects the purchasing power of current net farm income. ...
... Real Net Farm Income, having been adjusted for inflation, reflects the purchasing power of current net farm income. ...
Slide 1
... • Financialization is in deep trouble. Crises are opportunities for radical change. The unraveling of the current regime demands much more than well-meaning but limited financial sector reform • In particular, we need to overhaul many of our institutions, not only the financial ones, in order to ree ...
... • Financialization is in deep trouble. Crises are opportunities for radical change. The unraveling of the current regime demands much more than well-meaning but limited financial sector reform • In particular, we need to overhaul many of our institutions, not only the financial ones, in order to ree ...
AP Macro syllabus - Henry County Schools
... List of Key Concepts and Graphs: Concepts: marginal propensity to consume, the multiplier effect, reasons for a downward sloping aggregate demand curve, determinants of aggregate demand, aggregate supply in the short and long run, sticky versus flexible prices and wages, determination of equilibrium ...
... List of Key Concepts and Graphs: Concepts: marginal propensity to consume, the multiplier effect, reasons for a downward sloping aggregate demand curve, determinants of aggregate demand, aggregate supply in the short and long run, sticky versus flexible prices and wages, determination of equilibrium ...
2010 FRQ2
... Quantity of Loanable Funds Answer to 1. (d) As can be shown in the graph, the government borrowing would increase demand for money in the LFM and push the RIR up. 1. (e) (i) The higher RIR will result in less investment in tools and machinery. (e) (ii) The decrease in tools and machinery will decrea ...
... Quantity of Loanable Funds Answer to 1. (d) As can be shown in the graph, the government borrowing would increase demand for money in the LFM and push the RIR up. 1. (e) (i) The higher RIR will result in less investment in tools and machinery. (e) (ii) The decrease in tools and machinery will decrea ...
QUIZ 2 14.02 Principles of Macroeconomics April 14, 2005 I. True/False (30 points)
... False. Since the more forward looking are consumers and …rms, the weaker is the relationship between the current nominal/real interest rate and output, which translates into a steeper IS curve. (ch. 17) 6. According to the basic AS-AD model, an increase in the …scal de…cit will have no impact on inv ...
... False. Since the more forward looking are consumers and …rms, the weaker is the relationship between the current nominal/real interest rate and output, which translates into a steeper IS curve. (ch. 17) 6. According to the basic AS-AD model, an increase in the …scal de…cit will have no impact on inv ...
Pre-Test Chap 15 Handout Page
... The most compelling evidence supporting the hypothesis of rational expectations is (a) the fact that high rates of job creation and job destruction due to structural shifts in the British economy in the 1920s caused higher unemployment. (b) the sudden end to hyperinflation in post-World War I German ...
... The most compelling evidence supporting the hypothesis of rational expectations is (a) the fact that high rates of job creation and job destruction due to structural shifts in the British economy in the 1920s caused higher unemployment. (b) the sudden end to hyperinflation in post-World War I German ...
Tutorial
... 3. Assume the demand for money curve is stationary and the Fed increases the money supply. The result is that people a. increase the supply of bonds, thus driving up the interest rate. b. increase the supply of bonds, thus driving down the interest rate. c. increase the demand for bonds, thus drivi ...
... 3. Assume the demand for money curve is stationary and the Fed increases the money supply. The result is that people a. increase the supply of bonds, thus driving up the interest rate. b. increase the supply of bonds, thus driving down the interest rate. c. increase the demand for bonds, thus drivi ...
Is it a Recessionary Gap or a fall in Potential Output?
... monetary policy reaction curve to the right, which shifts the AD curve to the right. This would close the recessionary gap immediately, at the cost of permanently higher inflation. If, however, the inflation shock happens to come along with a decline in potential output, things would be very differe ...
... monetary policy reaction curve to the right, which shifts the AD curve to the right. This would close the recessionary gap immediately, at the cost of permanently higher inflation. If, however, the inflation shock happens to come along with a decline in potential output, things would be very differe ...
Document
... as monetizing the debt? a) It simply has the Treasury print more money, b) It directly pays those parties it owes with IOUs, c) it directs the Federal Reserve to sell treasury bonds in the open market to private investors, d) it requests loans from the World Bank. 21. An increase in the average lev ...
... as monetizing the debt? a) It simply has the Treasury print more money, b) It directly pays those parties it owes with IOUs, c) it directs the Federal Reserve to sell treasury bonds in the open market to private investors, d) it requests loans from the World Bank. 21. An increase in the average lev ...
New Monetary Policy and Keynes
... steps in place the central bank should take; this may include publishing an explanation, or submitting a letter to the government explaining the reasons for missing the target and how to return to target. Given these attributes, two types of IT central banks can be identified: the explicit type, and ...
... steps in place the central bank should take; this may include publishing an explanation, or submitting a letter to the government explaining the reasons for missing the target and how to return to target. Given these attributes, two types of IT central banks can be identified: the explicit type, and ...
Interest rate
... investor expectations about future inflation rates LIQUIDITY PREFERENCE THEORY: Investors are willing to accept lower interest rates on short-term debt securities which provide greater liquidity and less interest rate risk ...
... investor expectations about future inflation rates LIQUIDITY PREFERENCE THEORY: Investors are willing to accept lower interest rates on short-term debt securities which provide greater liquidity and less interest rate risk ...
inequality as determinant of growth
... Cycle increases inequality in HBS mostly because of the increased share of top income groups: inequality is pro-cyclical. Gini increases on account of cycles are relatively small compare to the overall inequality changes. (That was a trend of decreasing Gini in the UK.) This pro-cyclical nature of i ...
... Cycle increases inequality in HBS mostly because of the increased share of top income groups: inequality is pro-cyclical. Gini increases on account of cycles are relatively small compare to the overall inequality changes. (That was a trend of decreasing Gini in the UK.) This pro-cyclical nature of i ...
Macro final exam study guide – True/False questions
... 18.The most commonly used tool of monetary policy by the Federal Reserve system is to change the discount rate. FALSE - Open market operations are the most frequently used tool. 19.An open market purchase of government securities (such as Treasury Bills) by the Fed will decrease the money supply an ...
... 18.The most commonly used tool of monetary policy by the Federal Reserve system is to change the discount rate. FALSE - Open market operations are the most frequently used tool. 19.An open market purchase of government securities (such as Treasury Bills) by the Fed will decrease the money supply an ...
Monetary Policy Functions and Transmission Mechanisms: An
... rationing that arises from information asymmetries between financial institutions and the firms and consumers to which they lend. This occurs because monetary policy affects the extent of adverse selection and moral hazard that constrain credit provision. It is argued that a monetary expansion allev ...
... rationing that arises from information asymmetries between financial institutions and the firms and consumers to which they lend. This occurs because monetary policy affects the extent of adverse selection and moral hazard that constrain credit provision. It is argued that a monetary expansion allev ...
Japanese Economic Recovery and the Macroeconomic Policy Mix
... sector and financial sector management. In the post war years, Japanese economy had created a banking structure, distinctly different from the Anglo-Saxon model of financial intermediation, where "a bank not only provides loans to a firm, but also holds its stock. Typically, a firm develops a relati ...
... sector and financial sector management. In the post war years, Japanese economy had created a banking structure, distinctly different from the Anglo-Saxon model of financial intermediation, where "a bank not only provides loans to a firm, but also holds its stock. Typically, a firm develops a relati ...
Why Are Long-Term Interest Rates So Low?
... investors worry about inflation risk, they require additional compensation for holding nominal bonds and the term premium is positive. But when low inflation or even deflation is an important concern, bonds can be viewed as an insurance against this risk, resulting in a negative term premium (Campbe ...
... investors worry about inflation risk, they require additional compensation for holding nominal bonds and the term premium is positive. But when low inflation or even deflation is an important concern, bonds can be viewed as an insurance against this risk, resulting in a negative term premium (Campbe ...
Annual Meeting - Lorenzo Bini Smaghi
... Europe in the 1950s and 1960s. In central and western European countries, there does not seem to be such a paradox. There are, by and large, no borrowing constraints as countries are bound by what is called the acquis communautaire, in other words, all the laws and agreements, including the treaties ...
... Europe in the 1950s and 1960s. In central and western European countries, there does not seem to be such a paradox. There are, by and large, no borrowing constraints as countries are bound by what is called the acquis communautaire, in other words, all the laws and agreements, including the treaties ...
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.