Macroeconomics
... a) Find the equation for the IS curve. (5 Marks) b) Find the equation for the LM curve. (5 Marks) c) Solve for equilibrium real output (Y), disposable income (YD) the equilibrium interest rate (i), consumption (C), investment (I) and private saving (S). (5 Marks) d) Verify that production equals dem ...
... a) Find the equation for the IS curve. (5 Marks) b) Find the equation for the LM curve. (5 Marks) c) Solve for equilibrium real output (Y), disposable income (YD) the equilibrium interest rate (i), consumption (C), investment (I) and private saving (S). (5 Marks) d) Verify that production equals dem ...
Why Has This Recession Not Produced a Price Deflation?
... interest rate is pushed down to zero through monetary policy, if prices continue falling at 3 percent, then the real interest rate remains at 3 percent, which may be too high for a recovery. Secondly, price deflation also worsens the balance sheets of firms: the real value of debt increases relative ...
... interest rate is pushed down to zero through monetary policy, if prices continue falling at 3 percent, then the real interest rate remains at 3 percent, which may be too high for a recovery. Secondly, price deflation also worsens the balance sheets of firms: the real value of debt increases relative ...
Europäische Geldpolitik
... money a prominent role in the Eurosystem’s strategy was important. Money constitutes a natural, firm and reliable “nominal anchor” for monetary policy aiming at the maintenance of price stability. The important role played by money in the overall stability oriented strategy also emphasises the respo ...
... money a prominent role in the Eurosystem’s strategy was important. Money constitutes a natural, firm and reliable “nominal anchor” for monetary policy aiming at the maintenance of price stability. The important role played by money in the overall stability oriented strategy also emphasises the respo ...
What is deflation? A continual decline in the average price level of
... GDP: total value of goods/services produced within a country’s physical borders, GNP: included those also produced outside the physical borders ...
... GDP: total value of goods/services produced within a country’s physical borders, GNP: included those also produced outside the physical borders ...
Soustředění 4
... 1. transaction money – used for the exchange of goods and services, consists of notes and coins and also bank money – money deposited with the banks in current accounts, where payment can be made by a money transfer 2. near money – this type of money needs some time to be turned into transaction mon ...
... 1. transaction money – used for the exchange of goods and services, consists of notes and coins and also bank money – money deposited with the banks in current accounts, where payment can be made by a money transfer 2. near money – this type of money needs some time to be turned into transaction mon ...
imf financial crisis loans (march 2009)
... “Reflecting the pro-cyclical fiscal stance since 2006 and limited budgetary financing options, there is no scope now for countercyclical fiscal loosening. Anything less than a tight fiscal stance could also jeopardize the credibility of the program in the eyes of foreign investors and the Serbian pu ...
... “Reflecting the pro-cyclical fiscal stance since 2006 and limited budgetary financing options, there is no scope now for countercyclical fiscal loosening. Anything less than a tight fiscal stance could also jeopardize the credibility of the program in the eyes of foreign investors and the Serbian pu ...
Fiscal Policy Influences Aggregate Demand
... • With higher interest rate, return on saving increase so consumers more likely to save and less likely to invest in new housing • Therefore, Q of goods & services will fall; basically explaining interest rate effect ...
... • With higher interest rate, return on saving increase so consumers more likely to save and less likely to invest in new housing • Therefore, Q of goods & services will fall; basically explaining interest rate effect ...
Acting to Avoid a Great Stagnation
... Communicating that we anticipate low short-term rates likely to be warranted at least through mid2015; accommodative until recovery is sustainable Context of price stability; assessment of costs, efficacy ...
... Communicating that we anticipate low short-term rates likely to be warranted at least through mid2015; accommodative until recovery is sustainable Context of price stability; assessment of costs, efficacy ...
FedViews
... agency debt and agency mortgage-backed securities will be around $250 billion to $300 billion over the same period. Taken together, the Desk anticipated that it would purchase $850 billion to $900 billion in longer-term Treasuries through the end of the second quarter of 2011. The FOMC also decided ...
... agency debt and agency mortgage-backed securities will be around $250 billion to $300 billion over the same period. Taken together, the Desk anticipated that it would purchase $850 billion to $900 billion in longer-term Treasuries through the end of the second quarter of 2011. The FOMC also decided ...
1 1) Consider I = b +b Y-b
... E) Let’s assume you’re still the central banker many years later when inflation has again become uncomfortably high. You announce that you again plan to undertake a disinflationary policy. Remembering how well you handled the first disinflation, the people of Macronesia believe that you will carry o ...
... E) Let’s assume you’re still the central banker many years later when inflation has again become uncomfortably high. You announce that you again plan to undertake a disinflationary policy. Remembering how well you handled the first disinflation, the people of Macronesia believe that you will carry o ...
APS7
... price of imports from other countries to the US will be relatively more expensive. Therefore, the demand for US exports will increase, while the US demand for imports will decrease, and therefore the trade surplus will increase as we export more and import less. This will then cause AEd to increase, ...
... price of imports from other countries to the US will be relatively more expensive. Therefore, the demand for US exports will increase, while the US demand for imports will decrease, and therefore the trade surplus will increase as we export more and import less. This will then cause AEd to increase, ...
neweconchsunit3upload - Goshen Community Schools
... 1. control the nation’s money supply (practice monetary policy) 2. serve as a banker’s bank (and monitors “bad banks”, lender of last resort) 3. clearinghouse for all checks 4. serve as the Government’s bank Money is measured, M1 & M2 are the primary measurements used. M1 = demand deposits + currenc ...
... 1. control the nation’s money supply (practice monetary policy) 2. serve as a banker’s bank (and monitors “bad banks”, lender of last resort) 3. clearinghouse for all checks 4. serve as the Government’s bank Money is measured, M1 & M2 are the primary measurements used. M1 = demand deposits + currenc ...
Rate of interest
... 4. Rate of growth in GDP – affects domestic demand for agricultural products (remember the income elasticity of demand. 5. Rate of foreign exchange – reflects the value of the dollar relative to client nation currencies and hence the export demand for agricultural products. ...
... 4. Rate of growth in GDP – affects domestic demand for agricultural products (remember the income elasticity of demand. 5. Rate of foreign exchange – reflects the value of the dollar relative to client nation currencies and hence the export demand for agricultural products. ...
Book Review on - Portland State University
... enlarging the public debt of the country, whose real cost can be increased by deflation. Iwamura, Kudo, and Watanabe (Chapter 6) and Ball (Chapter 7) look into the interaction between monetary and fiscal policy for Japan. Ball’s chapter investigates an interesting and ambitious question: how an econ ...
... enlarging the public debt of the country, whose real cost can be increased by deflation. Iwamura, Kudo, and Watanabe (Chapter 6) and Ball (Chapter 7) look into the interaction between monetary and fiscal policy for Japan. Ball’s chapter investigates an interesting and ambitious question: how an econ ...
Review Questions for Midterm #1
... would be broken down using the three different approaches to calculating GDP. 2) A northerly country produces tuna steaks and snowboards. They produced the following quantities at the following prices in the last two years. ...
... would be broken down using the three different approaches to calculating GDP. 2) A northerly country produces tuna steaks and snowboards. They produced the following quantities at the following prices in the last two years. ...
Unit 3 Macroeconomics-pp_UPDATED 2013
... influence the cost and availability of credit which is the interest rate. (Federal Reserve controls this) ...
... influence the cost and availability of credit which is the interest rate. (Federal Reserve controls this) ...
Principles of Economics (MACRO) Syllabus
... Emphasis: An examination of how supply and demand for a good determines both the quantity produced and the price at which the good sells. This model is the foundation of our discussion for the remaining of the text. ...
... Emphasis: An examination of how supply and demand for a good determines both the quantity produced and the price at which the good sells. This model is the foundation of our discussion for the remaining of the text. ...
Unit 6 The Phillips Curve
... ● The unemployment rate tends to shift towards its normal rate ○ Natural Rate of Unemployment- 5% ○ The natural unemployment rate is where the economy tends to gravitate towards in the long run. However, the natural rate may not be socially ...
... ● The unemployment rate tends to shift towards its normal rate ○ Natural Rate of Unemployment- 5% ○ The natural unemployment rate is where the economy tends to gravitate towards in the long run. However, the natural rate may not be socially ...
FedViews
... The gap between the actual and natural rate of unemployment is one measure of resource slack. A related measure is the gap between potential and actual output. Potential is what output would be if the workforce and productive capacity were fully utilized at sustainable, noninflationary levels. Our c ...
... The gap between the actual and natural rate of unemployment is one measure of resource slack. A related measure is the gap between potential and actual output. Potential is what output would be if the workforce and productive capacity were fully utilized at sustainable, noninflationary levels. Our c ...
Inflation - ThaparNotes
... Inflation • Inflation is the percentage change in the value of the Price Index (PI) on a year-on year basis. • Various indices to measure inflation are: a) WPI (Wholesale Price Index) b) CPI (Consumer Price Index) • The basic cause of inflation is that the circulation of money in the market is more ...
... Inflation • Inflation is the percentage change in the value of the Price Index (PI) on a year-on year basis. • Various indices to measure inflation are: a) WPI (Wholesale Price Index) b) CPI (Consumer Price Index) • The basic cause of inflation is that the circulation of money in the market is more ...
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.