Questions Chapter 14
... declines. Once the public realizes that policymakers have not reduced the growth rate of nominal GDP, then the inflation rate, the output ratio, and the unemployment rate will return to their original levels as the SP curve shifts back to its original position. c. If the public does not find the ann ...
... declines. Once the public realizes that policymakers have not reduced the growth rate of nominal GDP, then the inflation rate, the output ratio, and the unemployment rate will return to their original levels as the SP curve shifts back to its original position. c. If the public does not find the ann ...
Lecture 3. Measuring Macroeconomic Variables
... interest minus the inflation rate. The expected real rate of interest is the nominal rate of interest minus the expected inflation rate. ...
... interest minus the inflation rate. The expected real rate of interest is the nominal rate of interest minus the expected inflation rate. ...
dynamic AD
... They are >0 and indicate how much the central bank Natural rate of Allows the interest rate target to respond to interest Fluctuations in inflation and output Recall that the real interest rate, rather than the nominal interest rate, influences the demand for goods and services. So, while the centra ...
... They are >0 and indicate how much the central bank Natural rate of Allows the interest rate target to respond to interest Fluctuations in inflation and output Recall that the real interest rate, rather than the nominal interest rate, influences the demand for goods and services. So, while the centra ...
dynamic AD
... They are >0 and indicate how much the central bank Natural rate of Allows the interest rate target to respond to interest Fluctuations in inflation and output Recall that the real interest rate, rather than the nominal interest rate, influences the demand for goods and services. So, while the centra ...
... They are >0 and indicate how much the central bank Natural rate of Allows the interest rate target to respond to interest Fluctuations in inflation and output Recall that the real interest rate, rather than the nominal interest rate, influences the demand for goods and services. So, while the centra ...
Consumer Price Index
... Americans. The reason is that many payments are tied, or “indexed,” to the CPI—the amount paid rises or falls when the CPI rises or falls. Today, 48 million people receive checks from Social Security. The amount of an individual’s check is determined by a formula that reflects his or her previous pa ...
... Americans. The reason is that many payments are tied, or “indexed,” to the CPI—the amount paid rises or falls when the CPI rises or falls. Today, 48 million people receive checks from Social Security. The amount of an individual’s check is determined by a formula that reflects his or her previous pa ...
Macroeconomics-B - the South African Institute of Management
... c) South African roads are full of potholes because of a lack of maintenance. d) The CO2 emissions from cars causes air pollution and other environmental impacts. e) b and c. 5. Inflation, as experienced by firms that manufacture goods, can be measured with׃ a) The core inflation rate. b) The prod ...
... c) South African roads are full of potholes because of a lack of maintenance. d) The CO2 emissions from cars causes air pollution and other environmental impacts. e) b and c. 5. Inflation, as experienced by firms that manufacture goods, can be measured with׃ a) The core inflation rate. b) The prod ...
So what does QE mean to me and my money?
... advice, estate planning and will writing are not regulated by the Financial Services Authority. ...
... advice, estate planning and will writing are not regulated by the Financial Services Authority. ...
In Search of a Prescription for the Japanese Economy
... undoing damage that deflation has done in increasing real value of debt ...
... undoing damage that deflation has done in increasing real value of debt ...
2: GDP VOCABULARY (with some additional terms) National
... Hyperinflation – Very rapid inflation whose impact on real output and employment is devastating ...
... Hyperinflation – Very rapid inflation whose impact on real output and employment is devastating ...
Teaching Modern Macroecsnornics at the Principles Level
... mid 1990's in the United States (a key feature of the "new economy") is due to more capital or to better technology. Students sometimes find that the formula is too mechanical, and providing an intuitive explanation of it is helpful. (One could derive the formula graphically using shifts and movemen ...
... mid 1990's in the United States (a key feature of the "new economy") is due to more capital or to better technology. Students sometimes find that the formula is too mechanical, and providing an intuitive explanation of it is helpful. (One could derive the formula graphically using shifts and movemen ...
Spring 2015 TEST 3 w/ solution
... 10 DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each. Real GDP this year using last year as the base year is: A) $100. B) $700. C) $1,300. D) $300 ...
... 10 DVDs were sold at $20 each and 5 DVD players were sold at $100 each, while this year 15 DVDs were sold at $10 each and 10 DVD players were sold at $50 each. Real GDP this year using last year as the base year is: A) $100. B) $700. C) $1,300. D) $300 ...
EC827_B4
... What is the impact of the deficit created by the fiscal stimulus (anticipated or unanticipated) on: ...
... What is the impact of the deficit created by the fiscal stimulus (anticipated or unanticipated) on: ...
ISMP_2012_L2_post
... • Business interest rate is real short rate plus risk and term premium (σt ) • Jones uses simplified version of these: no risk and other. • Jones solves for AS-AD as function of inflation; we stick with interest rates. ...
... • Business interest rate is real short rate plus risk and term premium (σt ) • Jones uses simplified version of these: no risk and other. • Jones solves for AS-AD as function of inflation; we stick with interest rates. ...
Lecture 13: Review Session, New Keynesian Model
... • Simple framework to think about relationship between ...
... • Simple framework to think about relationship between ...
VANCOUVER ISLAND UNIVERSITY
... c) falls or rises d) rises 18. Supply shocks cause a) increases in GDP b) cost-push inflation c) demand-pull inflation d) falling wages 19. The velocity of money is a) the time it takes for monetary policy to have an effect on world financial markets b) the number of times per year a dollar is spent ...
... c) falls or rises d) rises 18. Supply shocks cause a) increases in GDP b) cost-push inflation c) demand-pull inflation d) falling wages 19. The velocity of money is a) the time it takes for monetary policy to have an effect on world financial markets b) the number of times per year a dollar is spent ...
Chapter 09_20e
... Positive GDP occurs because the actual unemployment rate is less than the NRU; actual GDP is greater than ...
... Positive GDP occurs because the actual unemployment rate is less than the NRU; actual GDP is greater than ...
Multiple Choice Questions
... a. workers are being choosy about which jobs they take and so the economy is doing good well at matching workers to jobs and jobs to workers b. the market economy is not working well, because a large amount of cyclical unemployment means that production is far below the level of potential output** c ...
... a. workers are being choosy about which jobs they take and so the economy is doing good well at matching workers to jobs and jobs to workers b. the market economy is not working well, because a large amount of cyclical unemployment means that production is far below the level of potential output** c ...
Presentation - Federal Reserve Bank of St. Louis
... What is next? Forward guidance was viewed as appropriate during the period of zero interest rates, but is unlikely to be appropriate in less extreme circumstances. Decisions now depend on incoming data relative to forecasts. Better- or worse-than-expected outcomes may push the Committee toward a ...
... What is next? Forward guidance was viewed as appropriate during the period of zero interest rates, but is unlikely to be appropriate in less extreme circumstances. Decisions now depend on incoming data relative to forecasts. Better- or worse-than-expected outcomes may push the Committee toward a ...
Consumer Price Index
... Indexing to the CPI • The CPI has a direct and immediate impact on millions of Americans. • Many payments are tied, or “indexed,” to the CPI. • Today, 48 million people receive checks from Social Security. In addition, all Social Security payments are adjusted each year to offset any increase in co ...
... Indexing to the CPI • The CPI has a direct and immediate impact on millions of Americans. • Many payments are tied, or “indexed,” to the CPI. • Today, 48 million people receive checks from Social Security. In addition, all Social Security payments are adjusted each year to offset any increase in co ...
Short paper for Bryon Gaskin ECON201
... on again until it peaked around 1979. The results were very obvious, unemployment was constantly above 6% and real GDP was below potential GDP (Fox 134). The economy was not in a complete recession all through the seventies and early eights, however it’s over performance was very poor. According to ...
... on again until it peaked around 1979. The results were very obvious, unemployment was constantly above 6% and real GDP was below potential GDP (Fox 134). The economy was not in a complete recession all through the seventies and early eights, however it’s over performance was very poor. According to ...
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.