Lecture 6: Balance of Payments and Exchange Rates
... Balance of Payments Accounting and Exchange Rates The National Income Accounts The Gross National Product (GNP) of a country is the value of all the final goods and services produced by its factors of production and sold on the market in a given time period. A country’s GNP equals its National Incom ...
... Balance of Payments Accounting and Exchange Rates The National Income Accounts The Gross National Product (GNP) of a country is the value of all the final goods and services produced by its factors of production and sold on the market in a given time period. A country’s GNP equals its National Incom ...
Fiscal Policy Notes
... – Politicians face re-election and are more likely to support expansionary rather than contractionary fiscal policy. – Increased government spending and decreased taxes are almost always more popular with voters than increased taxes and decreased spending. ...
... – Politicians face re-election and are more likely to support expansionary rather than contractionary fiscal policy. – Increased government spending and decreased taxes are almost always more popular with voters than increased taxes and decreased spending. ...
Chapter 24 The Keynesian Framework Chapter 25 The IS-LM World
... D m = f (Y , r ) If MS increases then either income increases or interest rates drop. Supply of Money Fed basically determines supply Few uncontrollable factors (1) banks lending (2) public's preference for cash Letting D=S then solve for interest rate: ...
... D m = f (Y , r ) If MS increases then either income increases or interest rates drop. Supply of Money Fed basically determines supply Few uncontrollable factors (1) banks lending (2) public's preference for cash Letting D=S then solve for interest rate: ...
Economics 101
... unplanned depletion of inventory. 3. D. If mpc=0.9 then the government multiplier is 1/(1-.9)=10. So ∆Y*=Kg∆G 100=10∆G ∆G=10. 4. C. The marginal propensity to consume can be calculated as follows: when output increases from 3000 to 4000, consumption increases from 2000 to 2800. Therefore, the mp ...
... unplanned depletion of inventory. 3. D. If mpc=0.9 then the government multiplier is 1/(1-.9)=10. So ∆Y*=Kg∆G 100=10∆G ∆G=10. 4. C. The marginal propensity to consume can be calculated as follows: when output increases from 3000 to 4000, consumption increases from 2000 to 2800. Therefore, the mp ...
20140416 Budgeting and Macro Policy
... – If PY too large relative to trend, Federal Reserve pushes M down— and so Y (production and employment) falls and P (inflation) decelerates. – If the rest of the government does something that disturbs this relationship, the Federal Reserve can and does neutralize it • Hence fiscal policy should be ...
... – If PY too large relative to trend, Federal Reserve pushes M down— and so Y (production and employment) falls and P (inflation) decelerates. – If the rest of the government does something that disturbs this relationship, the Federal Reserve can and does neutralize it • Hence fiscal policy should be ...
Review Chapter 20 : The IS Curve
... A) Expansionary fiscal policy will cause the interest rate to fall. B) A fall in the money supply shifts the LM curve to the right. C) Changes in net exports arising from a change in interest rates causes a shift in the IS curve. D) For a given change in taxes, the IS curve will shift less than for ...
... A) Expansionary fiscal policy will cause the interest rate to fall. B) A fall in the money supply shifts the LM curve to the right. C) Changes in net exports arising from a change in interest rates causes a shift in the IS curve. D) For a given change in taxes, the IS curve will shift less than for ...
What is the Role of Government in Classical Economics?
... Long Run Growth Assumptions ~ This is known as the Secular Trend. Market Systems have shown long run growth in real GDP/Standard of Living as the PPF moves outward over time Misery Index ~ The number created when the Inflation Rate is added to the Unemployment Rate ...
... Long Run Growth Assumptions ~ This is known as the Secular Trend. Market Systems have shown long run growth in real GDP/Standard of Living as the PPF moves outward over time Misery Index ~ The number created when the Inflation Rate is added to the Unemployment Rate ...
... contracted slightly. Business and personal services accounted for the largest share of growth (0.4 percentage points), driven by public and private health services and legal and accounting activities. Mining expanded by 1.2% as operations began on a new iron ore deposit. Growth in copper mining was ...
Chap02
... • Individual investors and FIs have specific maturity preferences • Interest rates are determined by distinct supply and demand conditions within many maturity segments • Investors and borrowers deviate from their preferred maturity segment only when adequately compensated to do so ...
... • Individual investors and FIs have specific maturity preferences • Interest rates are determined by distinct supply and demand conditions within many maturity segments • Investors and borrowers deviate from their preferred maturity segment only when adequately compensated to do so ...
The Great Depression of the 1930s
... think it could have been large in some years (ZLB, U) • Recent estimates include Gordon & Krenn (2010) at 1.8 but Ramey & Zuchairy (2014) only 0.8 • NB: the key issue is how far output increases reflect expect future government spending (Ramey, 2011) so need a strategy to exploit ‘fiscal news’ ...
... think it could have been large in some years (ZLB, U) • Recent estimates include Gordon & Krenn (2010) at 1.8 but Ramey & Zuchairy (2014) only 0.8 • NB: the key issue is how far output increases reflect expect future government spending (Ramey, 2011) so need a strategy to exploit ‘fiscal news’ ...
Globalisation, import prices and inflation targeting
... down than the Bank economists?” (City AM, London, 21 May) • “The globalisation dividend over the past decade, as cheap goods from China pushed down prices, is fading” (Daily Telegraph, London, 16 May) • “China makes lots of cheap goods… the imports help keep US inflation down” (The Business, London, ...
... down than the Bank economists?” (City AM, London, 21 May) • “The globalisation dividend over the past decade, as cheap goods from China pushed down prices, is fading” (Daily Telegraph, London, 16 May) • “China makes lots of cheap goods… the imports help keep US inflation down” (The Business, London, ...
ECONOMICS why study it?
... – note that imports do depend on the current income level. We will buy more of all goods, domestic or foreign in our incomes increase. Thus, it is an induced expenditure, but we will ignore this in our class and treat it as autonomous! There are also other factors (other than income) that influence ...
... – note that imports do depend on the current income level. We will buy more of all goods, domestic or foreign in our incomes increase. Thus, it is an induced expenditure, but we will ignore this in our class and treat it as autonomous! There are also other factors (other than income) that influence ...
AP Practice Exam Part I Name: In the circular flow model of
... 19. When government borrowing increases interest rates it is known as: a. Crowding out b. Fiscal policy c. Monetary policy d. Financial regulation e. Expansionary monetary policy 20. According to the quantity theory of money, the money supply times the velocity of money is equal to: a. Nominal GDP ...
... 19. When government borrowing increases interest rates it is known as: a. Crowding out b. Fiscal policy c. Monetary policy d. Financial regulation e. Expansionary monetary policy 20. According to the quantity theory of money, the money supply times the velocity of money is equal to: a. Nominal GDP ...
Jamaica_en.pdf
... The provision of appropriate safety nets to ensure social stability during the period of economic transformation. It is to be noted however that the policy space has been seriously restricted by the weak albeit improving domestic and international demand and the heavy fiscal burden. ...
... The provision of appropriate safety nets to ensure social stability during the period of economic transformation. It is to be noted however that the policy space has been seriously restricted by the weak albeit improving domestic and international demand and the heavy fiscal burden. ...
Energy Economics – II Jeffrey Frankel Harpel
... According to intertemporal optimization theory, capital flows should be countercyclical: ...
... According to intertemporal optimization theory, capital flows should be countercyclical: ...
Hyperinflation in Zimbabwe - Federal Reserve Bank of Dallas
... Expectations play a major role in perpetuating higher prices during bouts of hyperinflation, and the effect of those expectations on money and inflation is amplified relative to other influences, such as the business cycle. To blunt exponential price increases, government finance must change in a cr ...
... Expectations play a major role in perpetuating higher prices during bouts of hyperinflation, and the effect of those expectations on money and inflation is amplified relative to other influences, such as the business cycle. To blunt exponential price increases, government finance must change in a cr ...
AP Exam Review wk 6
... – With a low inflation rate, it may take a while for workers and firms to react to a monetary expansion by raising ...
... – With a low inflation rate, it may take a while for workers and firms to react to a monetary expansion by raising ...
Remarks by Chairman Ben S - Central Valley Business Times
... Between 2000 and late 2005, the pace of construction of single-family homes rose more than 40 percent, and sales of both new and existing homes increased by a similar amount. Nationally, home prices increased about 60 percent over that period--an average figure that masks considerable variation in t ...
... Between 2000 and late 2005, the pace of construction of single-family homes rose more than 40 percent, and sales of both new and existing homes increased by a similar amount. Nationally, home prices increased about 60 percent over that period--an average figure that masks considerable variation in t ...
MACROECONOMICS SESSION 4
... 1: The aggregate market model measures real production with __________ and the price level with __________. (A) nominal GDP, the CPI (B) real GDP, the CPI (C) real GDP, the GDP price deflator (D) nominal GDP, the unemployment rate (E) national income, the GDP price deflator. 2: If the aggregate mark ...
... 1: The aggregate market model measures real production with __________ and the price level with __________. (A) nominal GDP, the CPI (B) real GDP, the CPI (C) real GDP, the GDP price deflator (D) nominal GDP, the unemployment rate (E) national income, the GDP price deflator. 2: If the aggregate mark ...
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.