14.02 Principles of Macroeconomics
... Assume that in period t-1, the unemployment rate is equal to the natural rate and the inflation rate is zero. 1. What is the natural rate of unemployment in the economy? In the medium run inflation is equal to expected inflation. The natural rate of unemployment is equal to 6%. 2. Suppose that begin ...
... Assume that in period t-1, the unemployment rate is equal to the natural rate and the inflation rate is zero. 1. What is the natural rate of unemployment in the economy? In the medium run inflation is equal to expected inflation. The natural rate of unemployment is equal to 6%. 2. Suppose that begin ...
Unit 4 Overview
... Unexpected inflation imposes costs on many people and benefits some others because it arbitrarily redistributes purchasing power. Inflation can reduce the rate of growth of national living standards because individuals and organizations use resources to protect themselves against the uncertainty of ...
... Unexpected inflation imposes costs on many people and benefits some others because it arbitrarily redistributes purchasing power. Inflation can reduce the rate of growth of national living standards because individuals and organizations use resources to protect themselves against the uncertainty of ...
Is the Israeli Economy in the Midst of a Deflationary Process?
... and thus further supported price declines. The rate of inflation in Israel is expected to continue to be low in the coming months. However, a prolonged process of price declines such as that seen in Japan is not likely. One of the required conditions for price declines to become chronic is for the p ...
... and thus further supported price declines. The rate of inflation in Israel is expected to continue to be low in the coming months. However, a prolonged process of price declines such as that seen in Japan is not likely. One of the required conditions for price declines to become chronic is for the p ...
Speech to the Arizona Council on Economic Education Scottsdale, Arizona
... about plummeting house prices have not materialized at the national level, though some pockets of the country have seen house prices actually decline. Phoenix provides a striking example of how the market has turned around: sales cancellations have been rampant on new homes, and, after rising about ...
... about plummeting house prices have not materialized at the national level, though some pockets of the country have seen house prices actually decline. Phoenix provides a striking example of how the market has turned around: sales cancellations have been rampant on new homes, and, after rising about ...
Macroeconomics Powerpoint
... • Also known as GDP • Total dollar value of all final goods and services produced in a nation in a single year – We only count the value of FINAL goods and services to avoid double counting. An economist would not include all of the parts of a computer being made and then the computer itself. They w ...
... • Also known as GDP • Total dollar value of all final goods and services produced in a nation in a single year – We only count the value of FINAL goods and services to avoid double counting. An economist would not include all of the parts of a computer being made and then the computer itself. They w ...
BULLETIN CENTRAL BANK OF THE REPUBLIC OF TURKEY INSIDE:
... policy stance and the tightening in global credit conditions are likely to restrain total demand in the period ahead. Under the assumption that government expenditures and incomes policy will evolve in line with the official projections, the underlying inflation is expected to lose pace in the mediu ...
... policy stance and the tightening in global credit conditions are likely to restrain total demand in the period ahead. Under the assumption that government expenditures and incomes policy will evolve in line with the official projections, the underlying inflation is expected to lose pace in the mediu ...
Speech to the Emeryville Chamber of Commerce Emeryville, CA
... seeing some tightness in labor markets, as the unemployment rate is just below the nation’s at about 4-1/2 percent. Turning to inflation, the recent news, as I said, hasn’t been what I’d like to see. Headline inflation, as measured by the personal consumption expenditures price index, showed an incr ...
... seeing some tightness in labor markets, as the unemployment rate is just below the nation’s at about 4-1/2 percent. Turning to inflation, the recent news, as I said, hasn’t been what I’d like to see. Headline inflation, as measured by the personal consumption expenditures price index, showed an incr ...
FedViews
... The data continue to suggest that the economy is gradually improving, albeit with a bit less momentum than previously projected. As a result of weaker data, higher oil prices, and slightly more fiscal stringency, we have lowered our real GDP growth forecast slightly to about 3½% this year and 4¼% in ...
... The data continue to suggest that the economy is gradually improving, albeit with a bit less momentum than previously projected. As a result of weaker data, higher oil prices, and slightly more fiscal stringency, we have lowered our real GDP growth forecast slightly to about 3½% this year and 4¼% in ...
Monetary Policy & Oil Crisis
... – Instead, BOJ deliberately caused slowdowns • And, implicitly, allowed speedups ...
... – Instead, BOJ deliberately caused slowdowns • And, implicitly, allowed speedups ...
Business Cycle
... Inflation – The buying power of the dollar decreases – If prices increased 5% during the last year, items that cost $100 then would now cost $105. – Ex: “Back when I was a kid…..a candy bar was ...
... Inflation – The buying power of the dollar decreases – If prices increased 5% during the last year, items that cost $100 then would now cost $105. – Ex: “Back when I was a kid…..a candy bar was ...
Chapter 23 PowerPoint Presentation - McGraw
... • Corrects for price changes • Nominal GDP • Uses current prices • Unemployment • Inflation • Increase in overall level of prices LO1 ...
... • Corrects for price changes • Nominal GDP • Uses current prices • Unemployment • Inflation • Increase in overall level of prices LO1 ...
Document
... index, typically based upon Consumer Price Index, or CPI, the most common measure of the aggregate price level. ...
... index, typically based upon Consumer Price Index, or CPI, the most common measure of the aggregate price level. ...
year 1
... economy is in a slump and vacation travel is at a minimum. 6. A plumber who works 5 hours per week for his church (on a paid basis) until he can get a full-time job ...
... economy is in a slump and vacation travel is at a minimum. 6. A plumber who works 5 hours per week for his church (on a paid basis) until he can get a full-time job ...
Presentation to the California Chamber of Commerce San Francisco, CA
... In addition to actions such as this, I believe the Committee has reinforced its credibility with the public by becoming more transparent and focusing on communication. By this I mean that the Committee has made a significant effort to let the public know what it has done and why in recent years. Le ...
... In addition to actions such as this, I believe the Committee has reinforced its credibility with the public by becoming more transparent and focusing on communication. By this I mean that the Committee has made a significant effort to let the public know what it has done and why in recent years. Le ...
Speech to the Silicon Valley Leadership Group Santa Clara, California
... as always, there are risks to this forecast that need to be watched closely. At this stage, the predominant risks center on whether inflation will continue to move down gradually. This concern was expressed in the statement following our last meeting, and I’d like to elaborate on that point in the r ...
... as always, there are risks to this forecast that need to be watched closely. At this stage, the predominant risks center on whether inflation will continue to move down gradually. This concern was expressed in the statement following our last meeting, and I’d like to elaborate on that point in the r ...
The Product Market Equation
... p = inflation rate -- the percent change of the price level1 between two years To get this number we select a representative (“average”) selection of goods (a “basket”). We buy this same basket in consecutive years and measure the percent change of the price of this basket. We find out what percent ...
... p = inflation rate -- the percent change of the price level1 between two years To get this number we select a representative (“average”) selection of goods (a “basket”). We buy this same basket in consecutive years and measure the percent change of the price of this basket. We find out what percent ...
MACROECONOMICS. FALL 2010. EXAM 1.
... occur during a given period of time, say, a year. T represents the total number of times that any two individuals exchange goods or services for money. P represents the price of a typical transaction. Hence, the product P × T represents the number of dollars exchanged in a year. The left-hand side o ...
... occur during a given period of time, say, a year. T represents the total number of times that any two individuals exchange goods or services for money. P represents the price of a typical transaction. Hence, the product P × T represents the number of dollars exchanged in a year. The left-hand side o ...
Chapter 35 PowerPoint Presentations
... Taxes and Real GDP • New findings suggest tax increases reduce real GDP (Romer and Romer 2008) • Positive output shocks raise tax revenues • Difficult to separate effects of tax changes from other effects • Investment falls sharply in response to tax changes ...
... Taxes and Real GDP • New findings suggest tax increases reduce real GDP (Romer and Romer 2008) • Positive output shocks raise tax revenues • Difficult to separate effects of tax changes from other effects • Investment falls sharply in response to tax changes ...
Robert T. Parry President and Chief Executive Officer
... dominating, we do know with more certainty that interest rates would have had to rise sooner or later in either case. If we were dealing mainly with excess demand, of course, the reason for tightening is obvious. But even if we were dealing mainly with a technology shock, the Fed still would have ha ...
... dominating, we do know with more certainty that interest rates would have had to rise sooner or later in either case. If we were dealing mainly with excess demand, of course, the reason for tightening is obvious. But even if we were dealing mainly with a technology shock, the Fed still would have ha ...
Mid-Summer Examinations 2015
... 21. The CPI is not a good measure of prices faced by students because: ) Most students’ consumption is different from the average consumer’s b) Most students do not hold any stocks and bonds c) Most students do not work d) None of the above 22. What are the main benefits of joining a currency union ...
... 21. The CPI is not a good measure of prices faced by students because: ) Most students’ consumption is different from the average consumer’s b) Most students do not hold any stocks and bonds c) Most students do not work d) None of the above 22. What are the main benefits of joining a currency union ...
Problem Set 4 (Chapters 10-11) Essay Questions Izmir University of Economics
... A) the price level in a given period expressed as a percentage of the price level in the base period, which is by definition equal to zero B) the inflation rate in a given period compared to the inflation rate in the base period, which is by definition equal to zero C) ) the price level in a given p ...
... A) the price level in a given period expressed as a percentage of the price level in the base period, which is by definition equal to zero B) the inflation rate in a given period compared to the inflation rate in the base period, which is by definition equal to zero C) ) the price level in a given p ...
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.