Aggregate Supply and Demand
... right at a slow, but steady pace Movements in AD over long periods can be large or small, depending largely on movements in money supply Figure 5-12 shows a set of AS and AD curves for the period 1970-2000 ...
... right at a slow, but steady pace Movements in AD over long periods can be large or small, depending largely on movements in money supply Figure 5-12 shows a set of AS and AD curves for the period 1970-2000 ...
Eco 101 Sample Practice Final Spring 2011
... Causes shortages 70 divided by growth rate per period = approximate doubling time Government prices set on certain activities, services, goods ...
... Causes shortages 70 divided by growth rate per period = approximate doubling time Government prices set on certain activities, services, goods ...
Inflation And Its Relationship To Unemployment And Growth
... inflationary process. Rational expectations are the expectations that the economists' model predicts. Adaptive expectations are those based, in some way, on what has been in the past. Extrapolative expectations are those that ...
... inflationary process. Rational expectations are the expectations that the economists' model predicts. Adaptive expectations are those based, in some way, on what has been in the past. Extrapolative expectations are those that ...
BU204_02 _JACKSON_EDWARD_9
... to help reduce the deficit; though this is only a short-term solution. Economists believe that the markets themselves drive successful economies, and we should wait for the market to level out, or for equilibrium. And many believe, that adding to the national debt (without guaranteed ways to provide ...
... to help reduce the deficit; though this is only a short-term solution. Economists believe that the markets themselves drive successful economies, and we should wait for the market to level out, or for equilibrium. And many believe, that adding to the national debt (without guaranteed ways to provide ...
NBER WORKING PAPER SERIES GLOBALIZATION, MACROECONOMIC PERFORMANCE, AND MONETARY POLICY Frederic S. Mishkin
... Kenneth Rogoff (2003) argues that globalization has led to greater price flexibility, which has reduced the ability of central banks to use inflation surprises to boost output. In other words, the Phillips curve will steepen, making more stark the short-run tradeoff between unemployment and inflatio ...
... Kenneth Rogoff (2003) argues that globalization has led to greater price flexibility, which has reduced the ability of central banks to use inflation surprises to boost output. In other words, the Phillips curve will steepen, making more stark the short-run tradeoff between unemployment and inflatio ...
Final Exam
... 3. [3 points] We observe the inflation rate in the US being 2% and the money market interest rate being set at 3%. Assuming that the Federal Reserve sets the interest rate target according to the Taylor rule, would we say that the Federal Reserve believes the economy is in a recession or an expansio ...
... 3. [3 points] We observe the inflation rate in the US being 2% and the money market interest rate being set at 3%. Assuming that the Federal Reserve sets the interest rate target according to the Taylor rule, would we say that the Federal Reserve believes the economy is in a recession or an expansio ...
Macroeconomics
... • Frictional unemployment refers to the unemployment that results from the time that it takes to match workers with jobs. In other words, it takes time for workers to search for the jobs that are best suit their tastes and skills. • Structural unemployment is the unemployment that results because th ...
... • Frictional unemployment refers to the unemployment that results from the time that it takes to match workers with jobs. In other words, it takes time for workers to search for the jobs that are best suit their tastes and skills. • Structural unemployment is the unemployment that results because th ...
Mankiw 5/e Chapter 1: The Science of Macroeconomics
... • So we will learn different models for studying different issues (e.g. unemployment, inflation, long-run growth). • For each new model, you should keep track of – its assumptions, – which of its variables are endogenous and which are exogenous, – the questions it can help us understand, – and those ...
... • So we will learn different models for studying different issues (e.g. unemployment, inflation, long-run growth). • For each new model, you should keep track of – its assumptions, – which of its variables are endogenous and which are exogenous, – the questions it can help us understand, – and those ...
C 1-5
... 1.b. Supply-side economics includes any policy measure that will increase potential GDP by shifting the long-run (vertical) AS-curve to the right. Supply-side economists put forth the view that a cut in income tax rates will increase the incentive to work, save, and invest. Some economists claimed t ...
... 1.b. Supply-side economics includes any policy measure that will increase potential GDP by shifting the long-run (vertical) AS-curve to the right. Supply-side economists put forth the view that a cut in income tax rates will increase the incentive to work, save, and invest. Some economists claimed t ...
Production and Cpi Day 2010
... How is the CPI market basket determined? The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. For the current CPI, this information was collected from the Consumer Expenditure Surveys for 2007 and 2008. In each of ...
... How is the CPI market basket determined? The CPI market basket is developed from detailed expenditure information provided by families and individuals on what they actually bought. For the current CPI, this information was collected from the Consumer Expenditure Surveys for 2007 and 2008. In each of ...
Chap 5 - TCU.edu
... depends on the level of 30-day interest rates each month when the fund rolls over maturing securities. The one-year savings deposit offers a 7.5% holding period return for the year. If you forecast that the rate on money market instruments will increase significantly above the current 6% yield, then ...
... depends on the level of 30-day interest rates each month when the fund rolls over maturing securities. The one-year savings deposit offers a 7.5% holding period return for the year. If you forecast that the rate on money market instruments will increase significantly above the current 6% yield, then ...
Due Date: Friday, September 17th
... percentage change in prices is zero and thus ΔM/M = ΔY/Y. Thus in the short run a 5 percent reduction in the money supply leads to a 5 percent reduction in output. In the long-run we know that prices are flexible and the economy returns to its natural rate of output. This implies that in the long-ru ...
... percentage change in prices is zero and thus ΔM/M = ΔY/Y. Thus in the short run a 5 percent reduction in the money supply leads to a 5 percent reduction in output. In the long-run we know that prices are flexible and the economy returns to its natural rate of output. This implies that in the long-ru ...
Aggregate Demand & Aggregate Supply
... AD-AS Model provides insight into inflation, unemployment, & economic growth ...
... AD-AS Model provides insight into inflation, unemployment, & economic growth ...
Class 21
... use less cash and bear more “shoe leather” leather” costs. Inflation causes changes in real tax burdens when tax rates are not indexed. Inflation makes it difficult to make accurate long run plans. Econ 101 M. Salemi ...
... use less cash and bear more “shoe leather” leather” costs. Inflation causes changes in real tax burdens when tax rates are not indexed. Inflation makes it difficult to make accurate long run plans. Econ 101 M. Salemi ...
Journal of Money, Credit, and Banking Washington D.C.
... sailing in uncharted waters, marking our maps with every bit of information along the way. Asset price bubbles and monetary policy My second point concerns asset prices. The role of the house price bubble in precipitating the current financial crisis places new urgency on a long-standing question: S ...
... sailing in uncharted waters, marking our maps with every bit of information along the way. Asset price bubbles and monetary policy My second point concerns asset prices. The role of the house price bubble in precipitating the current financial crisis places new urgency on a long-standing question: S ...
modeling and forecasting inflation in developing countries - cerge-ei
... all five countries that faced three major economic shocks: transition from central planning, disruption of economic ties with other ex-Soviet republics, and hyperinflation. Table 1 contains the data on annual inflation rates in the five Central Asian economies. Transition from the centrally planned ...
... all five countries that faced three major economic shocks: transition from central planning, disruption of economic ties with other ex-Soviet republics, and hyperinflation. Table 1 contains the data on annual inflation rates in the five Central Asian economies. Transition from the centrally planned ...
File
... population lead to a lower percentage of teenagers in the labor force, we would expect the natural rate of unemployment to decrease. In the 1990s, there were fewer teenagers than adults in the labor force. This change in demographics appears to have been what caused the natural rate of unemployment ...
... population lead to a lower percentage of teenagers in the labor force, we would expect the natural rate of unemployment to decrease. In the 1990s, there were fewer teenagers than adults in the labor force. This change in demographics appears to have been what caused the natural rate of unemployment ...
macro final.tst
... 68) The Keynesian explanation of the business cycle is based on A) volatile expectations about future sales and profits. B) unstable inflationary expectations. C) the inability of government policy-makers to predict the future course of the economy. D) shifts in monetary policy undertaken by the Fed ...
... 68) The Keynesian explanation of the business cycle is based on A) volatile expectations about future sales and profits. B) unstable inflationary expectations. C) the inability of government policy-makers to predict the future course of the economy. D) shifts in monetary policy undertaken by the Fed ...
Inflation
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.When the price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the consumer price index) over time. The opposite of inflation is deflation.Inflation affects an economy in various ways, both positive and negative. Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future.Inflation also has positive effects: Fundamentally, inflation gives everyone an incentive to spend and invest, because if they don't, their money will be worth less in the future. This increase in spending and investment can benefit the economy. However it may also lead to sub-optimal use of resources. Inflation reduces the real burden of debt, both public and private. If you have a fixed-rate mortgage on your house, your salary is likely to increase over time due to wage inflation, but your mortgage payment will stay the same. Over time, your mortgage payment will become a smaller percentage of your earnings, which means that you will have more money to spend. Inflation keeps nominal interest rates above zero, so that central banks can reduce interest rates, when necessary, to stimulate the economy. Inflation reduces unemployment to the extent that unemployment is caused by nominal wage rigidity. When demand for labor falls but nominal wages do not, as typically occurs during a recession, the supply and demand for labor cannot reach equilibrium, and unemployment results. By reducing the real value of a given nominal wage, inflation increases the demand for labor, and therefore reduces unemployment.Economists generally believe that high rates of inflation and hyperinflation are caused by an excessive growth of the money supply. However, money supply growth does not necessarily cause inflation. Some economists maintain that under the conditions of a liquidity trap, large monetary injections are like ""pushing on a string"". Views on which factors determine low to moderate rates of inflation are more varied. Low or moderate inflation may be attributed to fluctuations in real demand for goods and services, or changes in available supplies such as during scarcities. However, the consensus view is that a long sustained period of inflation is caused by money supply growing faster than the rate of economic growth.Today, most economists favor a low and steady rate of inflation. Low (as opposed to zero or negative) inflation reduces the severity of economic recessions by enabling the labor market to adjust more quickly in a downturn, and reduces the risk that a liquidity trap prevents monetary policy from stabilizing the economy. The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks that control monetary policy through the setting of interest rates, through open market operations, and through the setting of banking reserve requirements.