CLEP® Principles of Macroeconomics: At a Glance
... on monetary and fiscal policy tools that can be used to achieve particular policy objectives. Within this context, test-takers are expected to understand measurement concepts such as gross domestic product, consumption, investment, unemployment, inflation, inflationary gap and recessionary gap. Test ...
... on monetary and fiscal policy tools that can be used to achieve particular policy objectives. Within this context, test-takers are expected to understand measurement concepts such as gross domestic product, consumption, investment, unemployment, inflation, inflationary gap and recessionary gap. Test ...
Study Guide for Final
... focuses on GDP as a measure of total income. b. By the citizens of a country, regardless of where they live, in a given period of time; this definition focuses on GDP as a measure of total expenditure. c. Within a country in a given period of time; this definition focuses on GDP as a measure of tota ...
... focuses on GDP as a measure of total income. b. By the citizens of a country, regardless of where they live, in a given period of time; this definition focuses on GDP as a measure of total expenditure. c. Within a country in a given period of time; this definition focuses on GDP as a measure of tota ...
Business cycles
... The monetary policy tools available to achieve these ends: increasing interest rates by fiat; reducing the monetary base; and increasing reserve requirements. Wages and prices will begin to rise at faster rates if monetary policy stimulates aggregate demand enough to push labor and capital markets b ...
... The monetary policy tools available to achieve these ends: increasing interest rates by fiat; reducing the monetary base; and increasing reserve requirements. Wages and prices will begin to rise at faster rates if monetary policy stimulates aggregate demand enough to push labor and capital markets b ...
Aggregate Demand and Aggregate Supply
... Suppose that the price of a unit of output increased, but production cost of that unit stayed the same Profit on that unit will rise and so it will be a produced What if the price of the same. Profit on that unit will rise, and so it will be a produced. What if the price of output increased 5%, wh ...
... Suppose that the price of a unit of output increased, but production cost of that unit stayed the same Profit on that unit will rise and so it will be a produced What if the price of the same. Profit on that unit will rise, and so it will be a produced. What if the price of output increased 5%, wh ...
clicking here - Ken Farr (GCSU)
... air. How will the price and output of paper in a competitive market compare with their values under conditions of ideal economic efficiency? a. The price will be too high, and the output will be too large. b. The price will be too low, and the output will be too large. c. The price will be too low, ...
... air. How will the price and output of paper in a competitive market compare with their values under conditions of ideal economic efficiency? a. The price will be too high, and the output will be too large. b. The price will be too low, and the output will be too large. c. The price will be too low, ...
the business cycle
... There are six Headline boxes in this chapter dealing with various aspects of business cycles. Their titles and the concepts they illustrate are: "Market in Panic as Stocks Are Dumped in 12,894,600 Share Day: Bankers Halt It" (The Crash of 1929), An excerpt from a 1929 newspaper article captures the ...
... There are six Headline boxes in this chapter dealing with various aspects of business cycles. Their titles and the concepts they illustrate are: "Market in Panic as Stocks Are Dumped in 12,894,600 Share Day: Bankers Halt It" (The Crash of 1929), An excerpt from a 1929 newspaper article captures the ...
Unit 3 Notes - Phoenix Union High School District
... • Interest rate effect – If price levels rise consumers may need to borrow more for bigticket items. As the D for money increases, so does the price for its use (i %). Higher i % cause a decrease in I and some C (like cars). ...
... • Interest rate effect – If price levels rise consumers may need to borrow more for bigticket items. As the D for money increases, so does the price for its use (i %). Higher i % cause a decrease in I and some C (like cars). ...
The Costs of Inflation
... • Price Indexes are used to measure inflation. An index is a number that compares the price level in one period relative to the prices in some base year. An index is only a number; it is not expressed in dollars. There are several price indexes • Consumer price index (CPI) • Producer price ind ...
... • Price Indexes are used to measure inflation. An index is a number that compares the price level in one period relative to the prices in some base year. An index is only a number; it is not expressed in dollars. There are several price indexes • Consumer price index (CPI) • Producer price ind ...
AP Macro Economics - Spring Branch ISD
... Cyclical unemployment (deficient-demand unemployment) – Caused by a decline in total spending (common in recessionary phase). As demand for goods and services falls, employment falls and unemployment rises. 45. Define “Okun’s Law.” (pg 143) For every 1 percentage point by which the actual unempl ...
... Cyclical unemployment (deficient-demand unemployment) – Caused by a decline in total spending (common in recessionary phase). As demand for goods and services falls, employment falls and unemployment rises. 45. Define “Okun’s Law.” (pg 143) For every 1 percentage point by which the actual unempl ...
unemployment
... for a sustained period of time. – The shoe leather costs are enormous. – The government’s ability to collect taxes is undermined – people delay paying. – The market efficiency is disrupted if not destroyed. • A particularly high inflation rate occurred in Hungary after WWII – 19 800% per month! • If ...
... for a sustained period of time. – The shoe leather costs are enormous. – The government’s ability to collect taxes is undermined – people delay paying. – The market efficiency is disrupted if not destroyed. • A particularly high inflation rate occurred in Hungary after WWII – 19 800% per month! • If ...
Study Questions. More sample multiple choice
... some growth. Elimination of some property rights, less open trade, and making it harder to develop human capital would all be bad for growth. 31) c. A price index of 120 means prices are 120%, or 20% higher, compared to some base year. 32) a. Since those countries started out significantly poorer th ...
... some growth. Elimination of some property rights, less open trade, and making it harder to develop human capital would all be bad for growth. 31) c. A price index of 120 means prices are 120%, or 20% higher, compared to some base year. 32) a. Since those countries started out significantly poorer th ...
Answer: AD slopes do
... thereby increasing the quantity of goods and services demanded. Second, when prices fall, people need less money to make their purchases, so they lend more out, which reduces the interest rate. The lower interest rate encourages businesses to invest more, increasing the quantity of goods and service ...
... thereby increasing the quantity of goods and services demanded. Second, when prices fall, people need less money to make their purchases, so they lend more out, which reduces the interest rate. The lower interest rate encourages businesses to invest more, increasing the quantity of goods and service ...
New Keynesian Models and Their Fit to the Data
... by saving or by borrowing against expected future income; specifically, they save more when interest rates are high and consume more when interest rates are low. Firms are assumed to have some market power, allowing those selling similar products to charge different prices. Although firms choose the ...
... by saving or by borrowing against expected future income; specifically, they save more when interest rates are high and consume more when interest rates are low. Firms are assumed to have some market power, allowing those selling similar products to charge different prices. Although firms choose the ...
V3I2-1 - Abasyn Journal of Social Sciences
... $2-a-day criterion) account for more than 80 percent of the population in India, Bangladesh and Nepal, 73.6 percent in Pakistan, and 41.6 percent in Sri Lanka. In a country like Pakistan where nearly 40% people (based on one $ per day income) live below poverty line and per capita income is less the ...
... $2-a-day criterion) account for more than 80 percent of the population in India, Bangladesh and Nepal, 73.6 percent in Pakistan, and 41.6 percent in Sri Lanka. In a country like Pakistan where nearly 40% people (based on one $ per day income) live below poverty line and per capita income is less the ...
Principles of Economics, Case and Fair,9e
... Velocity has not been constant over the period from 1960 to 2007. There is a long-term trend—velocity has been rising. There are also fluctuations, some of them quite large. ...
... Velocity has not been constant over the period from 1960 to 2007. There is a long-term trend—velocity has been rising. There are also fluctuations, some of them quite large. ...
problem set 4 - Shepherd Webpages
... For each of the following, determine whether the aggregate demand curve shifts or the short-run aggregate supply curve shifts. Draw a separate graph to illustrate each situation (Mark the initial equilibrium so that all three curves cross at the full-employment output). Show clearly what happens to ...
... For each of the following, determine whether the aggregate demand curve shifts or the short-run aggregate supply curve shifts. Draw a separate graph to illustrate each situation (Mark the initial equilibrium so that all three curves cross at the full-employment output). Show clearly what happens to ...
chapter 5
... Two real interest rates: i – E = ex ante real interest rate: the real interest rate people expect at the time they buy a bond or take out a loan i – = ex post real interest rate: the real interest rate actually realized CHAPTER 5 ...
... Two real interest rates: i – E = ex ante real interest rate: the real interest rate people expect at the time they buy a bond or take out a loan i – = ex post real interest rate: the real interest rate actually realized CHAPTER 5 ...
Interest Rates - McGraw Hill Higher Education
... Fed sells bonds, increases reserve ratio, increases the discount rate, or decreases reserve auctions Excess reserves decrease ...
... Fed sells bonds, increases reserve ratio, increases the discount rate, or decreases reserve auctions Excess reserves decrease ...
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.