HW #4
... (b) [5 points] Suppose that people finally realize that they must save a larger proportion of their income in order to retire and that they simultaneously begin to use new technology, which allows them to reduce their holdings of real cash balances as a proportion of their income. Use the IS −LM mod ...
... (b) [5 points] Suppose that people finally realize that they must save a larger proportion of their income in order to retire and that they simultaneously begin to use new technology, which allows them to reduce their holdings of real cash balances as a proportion of their income. Use the IS −LM mod ...
MacroEconomic Goals - JV Penguinomics
... That does NOT mean that everybody has a job There is always going to be some people unemployed Civilian Labor Force: People 16 or older who have looked for a job in the past 4 weeks Goal: 5-6% unemployment rate considered the “natural rate” or “target rate” Every tenth of a point = 150,000 work ...
... That does NOT mean that everybody has a job There is always going to be some people unemployed Civilian Labor Force: People 16 or older who have looked for a job in the past 4 weeks Goal: 5-6% unemployment rate considered the “natural rate” or “target rate” Every tenth of a point = 150,000 work ...
Chapter 11
... indicates insufficient expenditures in the economy Insufficient AD results in a lower P, causing M/P to rise ...
... indicates insufficient expenditures in the economy Insufficient AD results in a lower P, causing M/P to rise ...
Ch13: Roles and services of the Federal Reserve
... set minimum reserve requirement on deposits iii. set margin requirements for investors to buy securities iv. set discount-window borrowing rate Federal Open Market Committee (FOMC) Chairperson of the Federal Reserve Board and president of the NY Fed bank serve as chairperson and vice-chairperson o ...
... set minimum reserve requirement on deposits iii. set margin requirements for investors to buy securities iv. set discount-window borrowing rate Federal Open Market Committee (FOMC) Chairperson of the Federal Reserve Board and president of the NY Fed bank serve as chairperson and vice-chairperson o ...
File
... (a) The graph above shows the production possibilities curve for Fischerland. The production of which of the following exhibits increasing opportunity costs: consumer goods only, capital goods only, both goods, or neither good? It shows increasing opportunity costs for both goods. The shape of the ...
... (a) The graph above shows the production possibilities curve for Fischerland. The production of which of the following exhibits increasing opportunity costs: consumer goods only, capital goods only, both goods, or neither good? It shows increasing opportunity costs for both goods. The shape of the ...
Stimulus/Austerity
... eventually: inflation rate drops luring the marginal consumers to enter the market. Also, lower inflation might attract foreigners to purchase the domestic products. Lower inflation also reduces nominal interest rates giving extra impetus to businesses to borrow for expansion when they expect condit ...
... eventually: inflation rate drops luring the marginal consumers to enter the market. Also, lower inflation might attract foreigners to purchase the domestic products. Lower inflation also reduces nominal interest rates giving extra impetus to businesses to borrow for expansion when they expect condit ...
PDF
... Macfarlane (1998: 13) noted: ‘We regarded this as probably too low, and certainly too narrow a range. No country had achieved this sort of inflation performance over any significant time interval in the past 50 years’. Bernie Fraser observed that, ‘The target was seen as weak by those that favoured ...
... Macfarlane (1998: 13) noted: ‘We regarded this as probably too low, and certainly too narrow a range. No country had achieved this sort of inflation performance over any significant time interval in the past 50 years’. Bernie Fraser observed that, ‘The target was seen as weak by those that favoured ...
External sector management in South Asia(27.11.14)
... International Monetary Fund is agreeable [12]. The stipulated sequence is that countries should liberalize trade policies first and then FDI policies. Capital account liberalization should be the last choice. Now, the question is whether there are elements in the policy frameworks, particularly thos ...
... International Monetary Fund is agreeable [12]. The stipulated sequence is that countries should liberalize trade policies first and then FDI policies. Capital account liberalization should be the last choice. Now, the question is whether there are elements in the policy frameworks, particularly thos ...
Outline of Lecture 1 – Basic Economics Concepts
... The effects of monetary policy are easy to show graphically. Begin with money supply, money demand, and an equilibrium interest rate. Show how both an increase and a decrease in the money supply affect interest rates. Definition of theory of liquidity preference: Keynes’s theory that the interest ra ...
... The effects of monetary policy are easy to show graphically. Begin with money supply, money demand, and an equilibrium interest rate. Show how both an increase and a decrease in the money supply affect interest rates. Definition of theory of liquidity preference: Keynes’s theory that the interest ra ...
Gold, Black Gold, Steel, and World Inflation: A SAS Study
... of the production of goods. Black gold and steel price increases increase production costs leading to higher prices and inflation through cost push. Gold is also used for hedging against inflation. Monetary assets decrease in value during inflation. Gold prices usually increase faster than the price ...
... of the production of goods. Black gold and steel price increases increase production costs leading to higher prices and inflation through cost push. Gold is also used for hedging against inflation. Monetary assets decrease in value during inflation. Gold prices usually increase faster than the price ...
1) For each of the following statements, say whether it is true or false
... 1) [12 points] Think about the way the price in a supply and demand market adjusts. Below you can find two descriptions of how a shortage might lead to a price increase in such a market. Pick the one you think is better. Then, explain the strong points of your chosen description and the weak points ...
... 1) [12 points] Think about the way the price in a supply and demand market adjusts. Below you can find two descriptions of how a shortage might lead to a price increase in such a market. Pick the one you think is better. Then, explain the strong points of your chosen description and the weak points ...
Economic Outlook and Policy Responses in the United States
... portion of our households owning homes from 64% to 69% helped enable the increase in mortgage debt to continue. Housing prices, for example, increased at an annual rate of 13% from 2001 to 2005 as compared to an increase over the long term of about 3% per year or 1 percent faster than overall inflat ...
... portion of our households owning homes from 64% to 69% helped enable the increase in mortgage debt to continue. Housing prices, for example, increased at an annual rate of 13% from 2001 to 2005 as compared to an increase over the long term of about 3% per year or 1 percent faster than overall inflat ...
Answer Key
... was (1.2/.4) = 3. The money multiplier at the new reserve ratio is (1.2/.3) = 4. Holding high powered money constant at 1000, the new money supply is 4000. The new price level is 4. As the fraction of deposits banks must hold in the form of reserves falls, they may make that money money available in ...
... was (1.2/.4) = 3. The money multiplier at the new reserve ratio is (1.2/.3) = 4. Holding high powered money constant at 1000, the new money supply is 4000. The new price level is 4. As the fraction of deposits banks must hold in the form of reserves falls, they may make that money money available in ...
Exam - Pearson Canada
... used to increase the money supply. There is no need to describe the money multiplier process or to explain how changing the money supply can affect the economy more generally. 2. Use aggregate demand and short run aggregate supply curves to illustrate why it is sometimes thought that in choosing its ...
... used to increase the money supply. There is no need to describe the money multiplier process or to explain how changing the money supply can affect the economy more generally. 2. Use aggregate demand and short run aggregate supply curves to illustrate why it is sometimes thought that in choosing its ...
Long Run
... 1) Open Market Operations (buying and selling U.S. Treasury bonds). 2) Reserve Requirements (never really used). 3) Discount rate which member banks can borrow from the Fed (not meeting the reserave requirements). ...
... 1) Open Market Operations (buying and selling U.S. Treasury bonds). 2) Reserve Requirements (never really used). 3) Discount rate which member banks can borrow from the Fed (not meeting the reserave requirements). ...
macroprudential cap on debt-to-income ratio and
... boom credit supply has been tied to real estate values to a far larger extent than labor income. Therefore, I show that an optimal macroprudential policy would call for enlarging the role of labor income in credit supply decision, which would eventually lead to greater financial stability both in th ...
... boom credit supply has been tied to real estate values to a far larger extent than labor income. Therefore, I show that an optimal macroprudential policy would call for enlarging the role of labor income in credit supply decision, which would eventually lead to greater financial stability both in th ...
Il quadro economico globale
... The United States contends that the source of the external deficit is the overvalued yuan exchange rate, while domestic demand is out of balance because of the budget deficit The opposite position is taken inside the European Union: it is not an exchange rate problem China rejects the US thesi ...
... The United States contends that the source of the external deficit is the overvalued yuan exchange rate, while domestic demand is out of balance because of the budget deficit The opposite position is taken inside the European Union: it is not an exchange rate problem China rejects the US thesi ...
The Tools of Monetary Policy
... Money, Real GDP, and the Price Level This equation shows that the proportionate change in the price level equals the proportionate change in the quantity of money. This gives us the quantity theory of money: In the long run, the percentage increase in the price level equals the percentage increase ...
... Money, Real GDP, and the Price Level This equation shows that the proportionate change in the price level equals the proportionate change in the quantity of money. This gives us the quantity theory of money: In the long run, the percentage increase in the price level equals the percentage increase ...
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.