Eco 120 Tips and Exa..
... then the A$ becomes more expensive relative to other currencies, so our exports become more expensive overseas and foreign imports become cheaper here. There are some possible detrimental internal effects: • Australian net exports will decline. • If the economy is at full employment, an appreciation ...
... then the A$ becomes more expensive relative to other currencies, so our exports become more expensive overseas and foreign imports become cheaper here. There are some possible detrimental internal effects: • Australian net exports will decline. • If the economy is at full employment, an appreciation ...
Stagflation and Shortageflation: A Comparative Approach
... of interest in their own right, it is not clear that this is a sufficient basis for refuting evidence of shortages and low-supply response, particularly in food and agriculture, a fairly widely recognized phenomenon in African as well as Eastern European countries. In any event, this denial of the e ...
... of interest in their own right, it is not clear that this is a sufficient basis for refuting evidence of shortages and low-supply response, particularly in food and agriculture, a fairly widely recognized phenomenon in African as well as Eastern European countries. In any event, this denial of the e ...
Embargoed for release at 2:00 p.m., EDT, March 20, 2013
... The charts show actual values and projections for three economic variables, based on FOMC participants’ individual assessments of appropriate monetary policy: Change in Real Gross Domestic Product (GDP)—as measured from the fourth quarter of the previous year to the fourth quarter of the year indi ...
... The charts show actual values and projections for three economic variables, based on FOMC participants’ individual assessments of appropriate monetary policy: Change in Real Gross Domestic Product (GDP)—as measured from the fourth quarter of the previous year to the fourth quarter of the year indi ...
Euro-zone recovery: resilient (PDF, 127 KB)
... and is expected to grow modestly in the coming quarters, as suggested by globally improving hiring prospects in business surveys. However, unemployment remains high in a number of member States. Consequently, although the nominal wage negotiated in the past months, notably in Germany, is expected to ...
... and is expected to grow modestly in the coming quarters, as suggested by globally improving hiring prospects in business surveys. However, unemployment remains high in a number of member States. Consequently, although the nominal wage negotiated in the past months, notably in Germany, is expected to ...
Types of Unemployment
... - Having a large group of representative items helps eliminate the effect of some product’s price dropping while others tend to be on the rise. - Base year can be any year. - Price index for the base year will always be 100. - Index values over 100 indicate inflation. ...
... - Having a large group of representative items helps eliminate the effect of some product’s price dropping while others tend to be on the rise. - Base year can be any year. - Price index for the base year will always be 100. - Index values over 100 indicate inflation. ...
Massachusetts Avenue
... Department of Economics, Northwestern University. This research has been supported by the National Science Foundation. I am grateful to Robert Flood for helpful discussions and to Glenn Hubbard and Allan Meltzer for comments on a first draft. The research reported here is part of the NBER's research ...
... Department of Economics, Northwestern University. This research has been supported by the National Science Foundation. I am grateful to Robert Flood for helpful discussions and to Glenn Hubbard and Allan Meltzer for comments on a first draft. The research reported here is part of the NBER's research ...
The short run AS curve
... any given level of price shifts the AD curve. • Consumers, firms: exogenous changes in spending plans by consumers or firms (e.g. household savings before the Iraq war; pessimism after Lehman Bros bankruptcy) • Government: exogenous changes in fiscal, monetary and exchange rate policy ...
... any given level of price shifts the AD curve. • Consumers, firms: exogenous changes in spending plans by consumers or firms (e.g. household savings before the Iraq war; pessimism after Lehman Bros bankruptcy) • Government: exogenous changes in fiscal, monetary and exchange rate policy ...
Phillips curve
... • To reduce inflation, an economy must endure a period of high unemployment and low output. • When the Fed combats inflation, the economy moves down the short-run Phillips curve. • The economy experiences lower inflation but at the cost of higher unemployment. ...
... • To reduce inflation, an economy must endure a period of high unemployment and low output. • When the Fed combats inflation, the economy moves down the short-run Phillips curve. • The economy experiences lower inflation but at the cost of higher unemployment. ...
Answers to Practice Problems 2005
... An increase in the firm’s mark-up will shift the PS curve down to PS’ and raise the natural rate of unemployment from un to u’n. The real wage is reduced and the natural rate of unemployment is increased. For the economy as a whole, the increase in the mark-up has shifted the AS curve left/up. Sinc ...
... An increase in the firm’s mark-up will shift the PS curve down to PS’ and raise the natural rate of unemployment from un to u’n. The real wage is reduced and the natural rate of unemployment is increased. For the economy as a whole, the increase in the mark-up has shifted the AS curve left/up. Sinc ...
2. What is deflation?
... reductions induces households to postpone consumption and firms to reduce wage costs and delay investment, also in view of the higher rate of return. This depresses aggregate demand, ...
... reductions induces households to postpone consumption and firms to reduce wage costs and delay investment, also in view of the higher rate of return. This depresses aggregate demand, ...
Interest Rate Benchmarks - Federal Reserve Bank of Richmond
... to the casual observer: akin to deciding whether a bowl of porridge is too hot, too cold or just right. But policymakers have more to go on than subjective tastes. A systematic way to get at an answer to this question is to consider how a central bank moved interest rates in response to changing eco ...
... to the casual observer: akin to deciding whether a bowl of porridge is too hot, too cold or just right. But policymakers have more to go on than subjective tastes. A systematic way to get at an answer to this question is to consider how a central bank moved interest rates in response to changing eco ...
HE1002 –PRINCIPLES OF MACROECONOMICS Semester 1, 2014
... output, unemployment and inflation. The core of the course explores three important questions: What causes unemployment? What causes inflation? And what are the impacts of fiscal policy and monetary policy on short-run output? In addition, students will be introduced to the determinants of long-run ...
... output, unemployment and inflation. The core of the course explores three important questions: What causes unemployment? What causes inflation? And what are the impacts of fiscal policy and monetary policy on short-run output? In addition, students will be introduced to the determinants of long-run ...
Panel on: “Behavioral Economics and Economic Policy in the Past... Federal Reserve Bank of Boston Conference: “Implications of Behavioral...
... Phillips curve, although the papers at this conference demonstrate that behavioral economics has implications for many other aspects of macroeconomic modeling, including the behavior of housing and other asset prices, and the specification of crucial components of aggregate demand, such as the consu ...
... Phillips curve, although the papers at this conference demonstrate that behavioral economics has implications for many other aspects of macroeconomic modeling, including the behavior of housing and other asset prices, and the specification of crucial components of aggregate demand, such as the consu ...
Unit Two - WordPress.com
... basket is not always the best tool when comparing purchases made by consumers in two different years? ...
... basket is not always the best tool when comparing purchases made by consumers in two different years? ...
Inflation
... inflation refers to the loss the manager anticipates in buying power over time whereas unexpected inflation refers to the difference between actual and expected inflation. If rate of inflation is expected, then the manager take steps to make suitable adjustments in their proposals to avoid the adve ...
... inflation refers to the loss the manager anticipates in buying power over time whereas unexpected inflation refers to the difference between actual and expected inflation. If rate of inflation is expected, then the manager take steps to make suitable adjustments in their proposals to avoid the adve ...
Macroeconomic Measurements
... Total spending = total output = total income No unexpected changes in inventories Full-employment equilibrium is the goal: total spending = total production at the economy’s capacity to produce ...
... Total spending = total output = total income No unexpected changes in inventories Full-employment equilibrium is the goal: total spending = total production at the economy’s capacity to produce ...
GwartPPTAP3 - Crawfordsworld
... With adaptive expectations, a shift to a more expansionary policy will increase prices, expand output beyond full-employment, and reduce the unemployment rate below its natural level (a move to pt B in both frames). Decision makers, though, will eventually anticipate the rising prices and incorporat ...
... With adaptive expectations, a shift to a more expansionary policy will increase prices, expand output beyond full-employment, and reduce the unemployment rate below its natural level (a move to pt B in both frames). Decision makers, though, will eventually anticipate the rising prices and incorporat ...
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.