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... • Hyperinflations are periods when inflation rates are very large. • During such periods there tends to be a ‘flight from cash’, i.e. people hold as little cash as possible. – e.g. Germany in 1922-23, Hungary 1945-46, Brazil in the late 1980s • Large government budget deficits help to explain such p ...
... • Hyperinflations are periods when inflation rates are very large. • During such periods there tends to be a ‘flight from cash’, i.e. people hold as little cash as possible. – e.g. Germany in 1922-23, Hungary 1945-46, Brazil in the late 1980s • Large government budget deficits help to explain such p ...
UNIT 3 Measuring Economic Performance EQs and Vocab C.h 12
... 24. Bob is fired from his job. He looks for a job for 8 months and then gives up. Does Bob count as “unemployed”? EXPLAIN. 25. Explain, using an example, the wage price spiral. ...
... 24. Bob is fired from his job. He looks for a job for 8 months and then gives up. Does Bob count as “unemployed”? EXPLAIN. 25. Explain, using an example, the wage price spiral. ...
Unit 2A Vocab and Essential Questions
... 24. Bob is fired from his job. He looks for a job for 8 months and then gives up. Does Bob count as “unemployed”? EXPLAIN. 25. Explain, using an example, the wage price spiral. ...
... 24. Bob is fired from his job. He looks for a job for 8 months and then gives up. Does Bob count as “unemployed”? EXPLAIN. 25. Explain, using an example, the wage price spiral. ...
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... What Happens When There is a Zero Interest Rate Bound? The Fed affects AD via a change in money supply, which leads to a change in the interest rate and thereby the planned investment. However, the interest rate cannot be below zero. Zero Interest Rate Bound The interest rate cannot go below zero. ...
... What Happens When There is a Zero Interest Rate Bound? The Fed affects AD via a change in money supply, which leads to a change in the interest rate and thereby the planned investment. However, the interest rate cannot be below zero. Zero Interest Rate Bound The interest rate cannot go below zero. ...
MCF Outline 4
... (dampen business cycles) by changing the money supply. Since FX rates are the prices of one money for another, these “money models” of the economy are applied to different countries to predict and explain future movements in FX rates. ...
... (dampen business cycles) by changing the money supply. Since FX rates are the prices of one money for another, these “money models” of the economy are applied to different countries to predict and explain future movements in FX rates. ...
PPT
... save money during these hard times! If we all cut wages, the economy will grow! The world can grow its way out of the recession by increasing exports! ...
... save money during these hard times! If we all cut wages, the economy will grow! The world can grow its way out of the recession by increasing exports! ...
L01_IntroNIPA - Duke University`s Fuqua School of Business
... TR = Transfers to private sector INT = interest on national debt G = Government purchases Sg=Budget surplus if positive. If negative, then a budget deficit ...
... TR = Transfers to private sector INT = interest on national debt G = Government purchases Sg=Budget surplus if positive. If negative, then a budget deficit ...
Presentation to the Arizona Council on Economic Education, Tempe, AZ
... policy normalization, giving us space to fine-tune our responses to any surprise changes in economic conditions. If we were to wait too long to raise rates, the need to play catch-up wouldn’t leave much room for maneuver. Not to mention, it could roil financial markets and slow the economy in uninte ...
... policy normalization, giving us space to fine-tune our responses to any surprise changes in economic conditions. If we were to wait too long to raise rates, the need to play catch-up wouldn’t leave much room for maneuver. Not to mention, it could roil financial markets and slow the economy in uninte ...
A Simple Guide to "Secular Stagnation" Since its cyclical peak in
... A Simple Guide to "Secular Stagnation" Since its cyclical peak in 2007 – just prior to the financial crisis – the U.S. economy has grown by only 1.2% at an annual rate. This is down sharply from the 3.0% pace that had prevailed since 1990. The resulting cumulative shortfall now exceeds $2 trillion, ...
... A Simple Guide to "Secular Stagnation" Since its cyclical peak in 2007 – just prior to the financial crisis – the U.S. economy has grown by only 1.2% at an annual rate. This is down sharply from the 3.0% pace that had prevailed since 1990. The resulting cumulative shortfall now exceeds $2 trillion, ...
Theories on the Use of Inflation in Economic Analysis
... Despite this recognition indicated the need for stability, the notion is periodically subject to debate, which led ultimately to a lack of consensus on what should be understand by stability. This lack of consensus exists between academia and central banks. All these concerns about inflation have i ...
... Despite this recognition indicated the need for stability, the notion is periodically subject to debate, which led ultimately to a lack of consensus on what should be understand by stability. This lack of consensus exists between academia and central banks. All these concerns about inflation have i ...
Recommending a Strategy
... “We have explained on a number of occasions that the MPC does not have a target for the current account, nor does the MPC view deficits on the current account to be inflationary in themselves. The mandate to the Bank is to maintain inflation within the target range of 3 to 6 per cent. The risk to in ...
... “We have explained on a number of occasions that the MPC does not have a target for the current account, nor does the MPC view deficits on the current account to be inflationary in themselves. The mandate to the Bank is to maintain inflation within the target range of 3 to 6 per cent. The risk to in ...
FRBSF WEEKLY LETTER Monetary Policy in a Low Inflation Regime
... Brian Motley attempts to quantify the effect of inflation on long-run growth by examining statistical evidence from a cross section of countries, and he finds that high-inflation countries do tend to grow more slowly. For example, for OECD countries, his results suggest that reducing inflation from ...
... Brian Motley attempts to quantify the effect of inflation on long-run growth by examining statistical evidence from a cross section of countries, and he finds that high-inflation countries do tend to grow more slowly. For example, for OECD countries, his results suggest that reducing inflation from ...
Unit 4 Filled In
... the economy. A positive rate of inflation does not mean that every single price increases, nor that all prices increase by the same amount, nor that the price of some goods didn't fall. It represents an average price increase for the goods and services in the economy. ...
... the economy. A positive rate of inflation does not mean that every single price increases, nor that all prices increase by the same amount, nor that the price of some goods didn't fall. It represents an average price increase for the goods and services in the economy. ...
ECON 521 Special Topics in Economic Policy
... Goal Two: The Inflation Rate • Inflation Rate is the growth or percentage change in the overall price level. • Inflation rate measures the price level (P), through: -- Consumer Price Index (CPI) -- GDP Deflator • Inflation Rate = Percentage Change in (P) • Inflation erodes the purchasing power of m ...
... Goal Two: The Inflation Rate • Inflation Rate is the growth or percentage change in the overall price level. • Inflation rate measures the price level (P), through: -- Consumer Price Index (CPI) -- GDP Deflator • Inflation Rate = Percentage Change in (P) • Inflation erodes the purchasing power of m ...
ECON100 Sample MTII
... 11. Historically, nominal GDP has increased faster than real GDP because a) the general price level has fallen b) imports have risen more rapidly than exports c) improvements in product quality have not been reflected in prices d) the general price level has increased e) exports have risen more rapi ...
... 11. Historically, nominal GDP has increased faster than real GDP because a) the general price level has fallen b) imports have risen more rapidly than exports c) improvements in product quality have not been reflected in prices d) the general price level has increased e) exports have risen more rapi ...
Sample Exam Questions (CETA 2006) File
... State and explain a trade policy the Government could use to achieve this trade objective OTHER than policies aimed at free trade. ...
... State and explain a trade policy the Government could use to achieve this trade objective OTHER than policies aimed at free trade. ...
Quiz 1: Fall 2011
... consumption, however, depends on the price level P, perhaps because people hold their wealth in money and feel poorer when prices go up, decreasing real consumption even if their real incomes are unchanged. (Why precisely aggregate consumption depends on the price level is not important for this que ...
... consumption, however, depends on the price level P, perhaps because people hold their wealth in money and feel poorer when prices go up, decreasing real consumption even if their real incomes are unchanged. (Why precisely aggregate consumption depends on the price level is not important for this que ...
Sample Exam Questions - word 2003 File
... State and explain a trade policy the Government could use to achieve this trade objective OTHER than policies aimed at free trade. ...
... State and explain a trade policy the Government could use to achieve this trade objective OTHER than policies aimed at free trade. ...
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.