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Midterm 3
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 ...
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Costa_Rica_en.pdf

... According to ECLAC estimates, GDP will slip by 3% in real terms in 2009, mainly owing to weakened exports and consumption. As was the case in 2008, external demand is expected to fall and tourist arrivals to drop. Flows of foreign direct investment (FDI) are also expected to weaken. Private consumpt ...
Exam I from Summer 2006
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... b) trade liberalization has lead to a large transfer of manufacturing jobs overseas, recently, both, Ford and GM made announcements that they will be closing their plants in Atlanta leading to unemployment amongst their workers c) In 2002 the tourism industry suffered a decline and many hotel/restau ...
The Term Structure of Interest Rates
The Term Structure of Interest Rates

...  Expect rates to rise then want a higher return  After inflation has peaked, interest rates can continue to increase because investors reacting to the expected future inflation (even if future expectations not based upon actual inflation and current conditions) rather than current inflation ...
Fiscal Policy Practice Part 1
Fiscal Policy Practice Part 1

... slumps will be lessened by unemployment insurance benefits, which will support residents’ incomes, while the effects of booms will be diminished because tax revenues will go up. In contrast, incomes will not be supported in Boldovia during slumps because there is no unemployment insurance. In additi ...
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tackling demographic change

... Promoting demographic renewal – greater gender equality Promoting employment – more jobs and longer working lives Increasing productivity – investment in human capital and R&D Migration and integration policies ...
AP Macro Week 7 Practice Quiz: L – M, #31
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... (A) earns no interest. (B) provides for the bank's use of large amounts of cash. (C) is maintained by the bank at a fixed percentage set by the Federal Reserve. (D) is kept on account at the Federal Reserve Bank. (E) is part of the money supply. 11. Which of the following is a predictable advantage ...
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letter to shareholders

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Problem Sheet 1

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Part 1

... (6 points) Suppose that governments around the world begin to engage in expansionary fiscal policy (run large budget deficits) in order to stimulate economic activity in their countries. Use the short-run model of a small open economy (the Mundell-Fleming model) to illustrate graphically the impact ...
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Pensions crisis

The pensions crisis is a predicted difficulty in paying for corporate, state, and federal pensions in the United States and Europe, due to a difference between pension obligations and the resources set aside to fund them. Shifting demographics are causing a lower ratio of workers per retiree; contributing factors include retirees living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers, especially relative to the Post-WW2 Baby Boom). There is significant debate regarding the magnitude and importance of the problem, as well as the solutions.For example, as of 2008, the estimates for the underfunding of U.S. states' pension programs range from $1 trillion using the discount rate of 8% to $3.23 trillion using U.S. Treasury bond yields as the discount rate. The present value of unfunded obligations under Social Security as of August 2010 was approximately $5.4 trillion. In other words, this amount would have to be set aside today such that the principal and interest would cover the program's shortfall between tax revenues and payouts over the next 75 years.Some economists question the concept of funding, and, therefore underfunding. Storing funds by governments, in the form of fiat currencies, is the functional equivalent of storing a collection of their own IOUs. They will be equally inflationary to newly written ones when they do come to be used.Reform ideas are in three primary categories: a) Addressing the worker-retiree ratio, via raising the retirement age, employment policy and immigration policy; b) Reducing obligations via shifting from defined benefit to defined contribution pension types and reducing future payment amounts (by, for example, adjusting the formula that determines the level of benefits); and c) Increasing resources to fund pensions via increasing contribution rates and raising taxes.
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