1. What Macroeconomists Study 2. The Data of Macroeconomics
... - Real wage in 2000 = --------------------------- x 100 CPI of 2000 “A price index can be used to measure inflation and to deflate nominal values to adjust for inflation” 2) The GDP Deflator - Definition: The price index used to deflate GDP Nominal GDP - Real GDP = ------------------- x 100 GDP Defl ...
... - Real wage in 2000 = --------------------------- x 100 CPI of 2000 “A price index can be used to measure inflation and to deflate nominal values to adjust for inflation” 2) The GDP Deflator - Definition: The price index used to deflate GDP Nominal GDP - Real GDP = ------------------- x 100 GDP Defl ...
slides - Editorial Express
... Development, Uganda Bureau of Statistics to mention but a few. Annual time series data on consumer price index was used to plot the line graph to compare the trend. Data from 1980 - 2007 ...
... Development, Uganda Bureau of Statistics to mention but a few. Annual time series data on consumer price index was used to plot the line graph to compare the trend. Data from 1980 - 2007 ...
Answers to the above Grand Synthesis PROB FOR 101
... 9) Let us assume that Belgand has reached FEWPS by only using "fiscal policy". So the interest rate is still 6%. A government advisory board urges a new policy to stimulate growth and labor productivity by investing 200 (million Belmarks) in modern plant and equipment. What specific changes in taxes ...
... 9) Let us assume that Belgand has reached FEWPS by only using "fiscal policy". So the interest rate is still 6%. A government advisory board urges a new policy to stimulate growth and labor productivity by investing 200 (million Belmarks) in modern plant and equipment. What specific changes in taxes ...
INFLATION Inflation is defined as the steady and persistent rise in
... If wages are permitted to rise every time there is a rise in the general level of prices (the wage price spiral is operating), those who remain in work will experience little change in their standard of living. However, even if real wages remain virtually constant, money wages are rising, and this m ...
... If wages are permitted to rise every time there is a rise in the general level of prices (the wage price spiral is operating), those who remain in work will experience little change in their standard of living. However, even if real wages remain virtually constant, money wages are rising, and this m ...
Homework chs SD, 17, 18, 19 ECO 201: Principles of
... Using market values permits economists to add together different goods and services to get a measure of total output. For example, we can’t add together apples, bananas, and shoes, but we can add together their market values. Market value, as you can guess, is the equilibrium price for the goods and ...
... Using market values permits economists to add together different goods and services to get a measure of total output. For example, we can’t add together apples, bananas, and shoes, but we can add together their market values. Market value, as you can guess, is the equilibrium price for the goods and ...
14.02 Principles of Macroeconomics Problem Set 1 Fall 2004
... Part I. True/False/Uncertain Justify your answer with a short argument. 1. From 1960 to 2000, the US, EU, and Japan all have experienced similar rates of unemployment. 2. GDP is the value of all goods and services produced in the economy. 3. The Phillips Curve describes the negative relationship bet ...
... Part I. True/False/Uncertain Justify your answer with a short argument. 1. From 1960 to 2000, the US, EU, and Japan all have experienced similar rates of unemployment. 2. GDP is the value of all goods and services produced in the economy. 3. The Phillips Curve describes the negative relationship bet ...
FedViews
... Federal Open Market Committee (FOMC) members appear to disagree about the extent of resource slack, which is subject to considerable measurement uncertainty. The output gap—which is the deviation of real output from its potential—is usually measured using gross domestic product (GDP) data. But an al ...
... Federal Open Market Committee (FOMC) members appear to disagree about the extent of resource slack, which is subject to considerable measurement uncertainty. The output gap—which is the deviation of real output from its potential—is usually measured using gross domestic product (GDP) data. But an al ...
ecn121 tutorial kit - Covenant University
... Cost-push inflation is an inflation that results from an initial increase in costs. There are two main sources of increased costs: an increase in the money wage rate or an increase in the money price of raw materials, such as oil. ...
... Cost-push inflation is an inflation that results from an initial increase in costs. There are two main sources of increased costs: an increase in the money wage rate or an increase in the money price of raw materials, such as oil. ...
The Canadian Economy: Finding the Right Balance
... Keeping the Economy on an Even Keel So how is the Canadian economy performing these days and what is the Bank of Canada doing to help keep it on an even keel? Our economy has been expanding solidly for some time now—even through the Asian financial crisis of 1997-98—creating the conditions for the h ...
... Keeping the Economy on an Even Keel So how is the Canadian economy performing these days and what is the Bank of Canada doing to help keep it on an even keel? Our economy has been expanding solidly for some time now—even through the Asian financial crisis of 1997-98—creating the conditions for the h ...
Facing Economic Challenges
... Inflation is a general rise in price levels. Are the examples of price increases in documents B and C symptoms of inflation or isolated price increases? Compare the tone of documents A and C. Do economists care as much about inflation as consumers? Explain. ...
... Inflation is a general rise in price levels. Are the examples of price increases in documents B and C symptoms of inflation or isolated price increases? Compare the tone of documents A and C. Do economists care as much about inflation as consumers? Explain. ...
Fed Could Allow Higher Inflation as Interest Rates Remain Low
... The Fed’s preferred inflation measure has been moving up in recent months but has run below the target for more than four years. By David Harrison March 23, 2017 12:01 a.m. ET 1 COMMENTS U.S. interest rates are likely to stay historically low, which should prompt the Federal Reserve to rethink its a ...
... The Fed’s preferred inflation measure has been moving up in recent months but has run below the target for more than four years. By David Harrison March 23, 2017 12:01 a.m. ET 1 COMMENTS U.S. interest rates are likely to stay historically low, which should prompt the Federal Reserve to rethink its a ...
Macroeconomics Quiz 4 Topics
... 9. Milton Friedman, in his presidential address to the AEA, says that monetary policy can not be used to: (a) decrease unemployment, (b) decrease interest rates or (c) increase real output (real GDP). Why? Is he always correct? 10. How can an increase in the money supply lead to both an increase and ...
... 9. Milton Friedman, in his presidential address to the AEA, says that monetary policy can not be used to: (a) decrease unemployment, (b) decrease interest rates or (c) increase real output (real GDP). Why? Is he always correct? 10. How can an increase in the money supply lead to both an increase and ...
Eco 212_____Name
... the difference between national savings and desired investment. b. the difference between the quantity supplied and quantity demanded of nonmonetary assets. c. the portion of the change in output that cannot be explained by changes in measured capital or labor inputs. d. the portion of the adult pop ...
... the difference between national savings and desired investment. b. the difference between the quantity supplied and quantity demanded of nonmonetary assets. c. the portion of the change in output that cannot be explained by changes in measured capital or labor inputs. d. the portion of the adult pop ...
Midterm 3
... According to Keynesians, firms keep some workers on the payroll during recessions even if the firm doesn’t need them at that moment – to avoid losing hardto-replace workers. When demand increases, the firm can increase output without adding many new workers. This will make _____ appear to be pro-cyc ...
... According to Keynesians, firms keep some workers on the payroll during recessions even if the firm doesn’t need them at that moment – to avoid losing hardto-replace workers. When demand increases, the firm can increase output without adding many new workers. This will make _____ appear to be pro-cyc ...
Aide Memoire - IMF Staff Visit to the Czech Republic
... and the public. This communication includes statements regarding under what conditions monetary policy would not react to forecasted inflation moving outside the target band and reasons for missed targets. These clear communications are generally preferred to escape clauses—which can serve to underm ...
... and the public. This communication includes statements regarding under what conditions monetary policy would not react to forecasted inflation moving outside the target band and reasons for missed targets. These clear communications are generally preferred to escape clauses—which can serve to underm ...
1 The original Phillips curve and its Policy Implications Phillips
... unemployment. In the long-run, economy moves along the Long-Run Phillips Curve. However, some new Keynesians have come up with a different idea from their empirical observation of some European countries of the 1980s. Suppose that an economy is initially at the full employment level, but with a high ...
... unemployment. In the long-run, economy moves along the Long-Run Phillips Curve. However, some new Keynesians have come up with a different idea from their empirical observation of some European countries of the 1980s. Suppose that an economy is initially at the full employment level, but with a high ...
FedViews
... Oil price increases tend to create two distinct risks. First, higher prices are a kind of tax that saps household income, and some of the strength of the current recovery will be drained away by higher gasoline prices. Second, higher prices can sometimes pass through into final consumer prices and e ...
... Oil price increases tend to create two distinct risks. First, higher prices are a kind of tax that saps household income, and some of the strength of the current recovery will be drained away by higher gasoline prices. Second, higher prices can sometimes pass through into final consumer prices and e ...
Euro-zone Economic Outlook July 2013 (PDF, 158 KB)
... expected to remain weak. Exports growth and the need to replace an ageing capital stock will lead to a modest investment recovery in Q3 and Q4 2013 (+0.1% and +0.4% respectively). Under the assumption that Brent oil price remains stable at USD 103 per barrel in Q3 and Q4 and the euro/dollar exchange ...
... expected to remain weak. Exports growth and the need to replace an ageing capital stock will lead to a modest investment recovery in Q3 and Q4 2013 (+0.1% and +0.4% respectively). Under the assumption that Brent oil price remains stable at USD 103 per barrel in Q3 and Q4 and the euro/dollar exchange ...
Fourth Quiz with answers
... A) a small increase in aggregate output and small inflation. B) a large increase in aggregate output and large inflation. C) a small increase in aggregate output and relatively large inflation. D) a large increase in aggregate output and relatively small inflation. 5. If the long-run aggregate suppl ...
... A) a small increase in aggregate output and small inflation. B) a large increase in aggregate output and large inflation. C) a small increase in aggregate output and relatively large inflation. D) a large increase in aggregate output and relatively small inflation. 5. If the long-run aggregate suppl ...
Document
... to rise? • What is the difference between the equation of exchange and the simple quantity theory of money? • Predict what will happen to the AD curve as a result of each of the following: The money supply rises; Velocity falls; The money supply rises by a greater percentage than velocity falls; The ...
... to rise? • What is the difference between the equation of exchange and the simple quantity theory of money? • Predict what will happen to the AD curve as a result of each of the following: The money supply rises; Velocity falls; The money supply rises by a greater percentage than velocity falls; The ...
mainstream theory ii - American University
... 7. Briefly derive the fundamental dynamic equation of the Solow growth model, and then characterize the steady state. Determine the steady-state effects on Y /AN , Y /N , and Y when the exogenous population growth rate (N̂ ) undergoes a one-time, permanent decrease. (Here, A measures labor productiv ...
... 7. Briefly derive the fundamental dynamic equation of the Solow growth model, and then characterize the steady state. Determine the steady-state effects on Y /AN , Y /N , and Y when the exogenous population growth rate (N̂ ) undergoes a one-time, permanent decrease. (Here, A measures labor productiv ...
Causes Of Recession - School
... UK too as our chart indicates. The recessions since 1970 occurred in 1974-76, 198082 and between 1990-92 Since then there has been a path of sustained growth. 2005 was the weakest year with real GDP rising by 1.9% (well below trend) and 200809 are also likely to be years when real national output gr ...
... UK too as our chart indicates. The recessions since 1970 occurred in 1974-76, 198082 and between 1990-92 Since then there has been a path of sustained growth. 2005 was the weakest year with real GDP rising by 1.9% (well below trend) and 200809 are also likely to be years when real national output gr ...
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.