Problem Areas in AP Economics Real Interest rate
... Real Interest rate – cost of borrowing the money to buy the capital goods (machinery) If rate of return is greater than the cost of the interest, the investment will be profitable Ex: 10% rate of return is greater than 7% interest = profitable decision Even if capital is financed by savings, it give ...
... Real Interest rate – cost of borrowing the money to buy the capital goods (machinery) If rate of return is greater than the cost of the interest, the investment will be profitable Ex: 10% rate of return is greater than 7% interest = profitable decision Even if capital is financed by savings, it give ...
ECM B06: Course Plan
... Chapter 2 deals with measurement issues. How do you measure aggregate output (real or nominal), the average price level and the rate of inflation. These issues overlap all of the modelling chapters to follow. ...
... Chapter 2 deals with measurement issues. How do you measure aggregate output (real or nominal), the average price level and the rate of inflation. These issues overlap all of the modelling chapters to follow. ...
Appearances can be deceiving
... To many, the economy is strong enough to sustain a jolt of higher rates. Richmond´s Jeff Lacker is a case in point: The U.S. economy appears strong enough to warrant significantly higher interest rates, Richmond Federal Reserve Bank President Jeffrey Lacker said on Friday. Lacker, who is not a votin ...
... To many, the economy is strong enough to sustain a jolt of higher rates. Richmond´s Jeff Lacker is a case in point: The U.S. economy appears strong enough to warrant significantly higher interest rates, Richmond Federal Reserve Bank President Jeffrey Lacker said on Friday. Lacker, who is not a votin ...
Inflation - Herricks
... Effects of Inflation o Erosion of purchasing power o Erosion of income especially if on Fixed income ...
... Effects of Inflation o Erosion of purchasing power o Erosion of income especially if on Fixed income ...
Merit - NZQA
... Part A lacks correct economic detail in the explanation for Merit, foreign tourist spending shifts the export receipts component of aggregate demand in graph one. Part B has some of the expectation of Merit. The detailed explanation shows depth by providing two reasons for the cause of inflation to ...
... Part A lacks correct economic detail in the explanation for Merit, foreign tourist spending shifts the export receipts component of aggregate demand in graph one. Part B has some of the expectation of Merit. The detailed explanation shows depth by providing two reasons for the cause of inflation to ...
Harrod-Dommar Model
... Where, the level of capital K needed to produce an output Y is given by the equation K = σ Y where σ is called the capital-output ratio. Investment is a very important variable for the economy because Investment has a dual role. Investment represents an important component of the demand for the outp ...
... Where, the level of capital K needed to produce an output Y is given by the equation K = σ Y where σ is called the capital-output ratio. Investment is a very important variable for the economy because Investment has a dual role. Investment represents an important component of the demand for the outp ...
The AS-AD Model
... • The AD Curve relates the aggregate quantity of output to the general price level P • For any given level of money supply M, an increase in P implies that the real supply of money M/P must go down. It becomes harder for people to borrow money, causing the price of loans, i.e., the interest rate r t ...
... • The AD Curve relates the aggregate quantity of output to the general price level P • For any given level of money supply M, an increase in P implies that the real supply of money M/P must go down. It becomes harder for people to borrow money, causing the price of loans, i.e., the interest rate r t ...
No Slide Title
... FISCAL POLICY AND THE GSP (Provisional Version: last updated 24th February 2006) ...
... FISCAL POLICY AND THE GSP (Provisional Version: last updated 24th February 2006) ...
Thinking Like an Economist
... Technological advances in a particular industry can shift the PPF thus increasing the quantity of goods produced with the existing resources. TVs produced ...
... Technological advances in a particular industry can shift the PPF thus increasing the quantity of goods produced with the existing resources. TVs produced ...
Neoclassical
... The CBA begins by defining clearly what is being measured: what time-period is being considered, exactly what changes will be made, whose welfare is being included in the equation. The next stage is to identify all the physical impacts of the project before the most difficult stage of all: costing t ...
... The CBA begins by defining clearly what is being measured: what time-period is being considered, exactly what changes will be made, whose welfare is being included in the equation. The next stage is to identify all the physical impacts of the project before the most difficult stage of all: costing t ...
This PDF is a selection from an out-of-print volume from... Bureau of Economic Research
... positively correlated. The burning question then becomes whether factor accumulation causes productivity improvements, because the social returns to human and physical capital are higher than the private return; or whether differences in productivity that stem from other sources lead factors to be a ...
... positively correlated. The burning question then becomes whether factor accumulation causes productivity improvements, because the social returns to human and physical capital are higher than the private return; or whether differences in productivity that stem from other sources lead factors to be a ...
Fiscal and Monetary Policy
... monetary policy, or an erratic monetary policy. When the Fed increases the money supply, prices rise. Inflation begins to set in, just as the Fed decides to reduce the money supply. This causes output to decrease and unemployment to increase. Another cause of stagflation might be a market decrease i ...
... monetary policy, or an erratic monetary policy. When the Fed increases the money supply, prices rise. Inflation begins to set in, just as the Fed decides to reduce the money supply. This causes output to decrease and unemployment to increase. Another cause of stagflation might be a market decrease i ...
History of economic thought
... • (b) that they depended on supply and demand of loans, and hence on net saving and on profit opportunities open to borrowers; • (c) the naive view that they could be set by legal fiat. • Dudley North (1641–91): Interest rates, he argued, are determined by supply and demand for loans. it was “stock” ...
... • (b) that they depended on supply and demand of loans, and hence on net saving and on profit opportunities open to borrowers; • (c) the naive view that they could be set by legal fiat. • Dudley North (1641–91): Interest rates, he argued, are determined by supply and demand for loans. it was “stock” ...
L3B Business Cycle Theory PPT
... invest in new capital goods. This investment spending creates new jobs and growth. If firms decide to halt investment, this slows the economy down and can cause unemployment. © 2009, TESCCC ...
... invest in new capital goods. This investment spending creates new jobs and growth. If firms decide to halt investment, this slows the economy down and can cause unemployment. © 2009, TESCCC ...
NAEP released item, Grade 12
... Students can identify the various economic roles that governments play as providers of goods and services. In addition, economically literate students can ...
... Students can identify the various economic roles that governments play as providers of goods and services. In addition, economically literate students can ...
Philippines
... The economy grew at 0.9%, amidst the global recession and two disastrous typhoons in 2009. Though this is the lowest GDP growth rate recorded since the financial crisis in 1997-8, it is a better performance than the economic contraction (-1%) the country went through during that time. GNP figures, o ...
... The economy grew at 0.9%, amidst the global recession and two disastrous typhoons in 2009. Though this is the lowest GDP growth rate recorded since the financial crisis in 1997-8, it is a better performance than the economic contraction (-1%) the country went through during that time. GNP figures, o ...
View Slide Show for Lesson 11-1
... policy has primarily aimed at controlling inflation. Given acceptable inflation rates, the Fed is willing to try to close a recessionary gap. In recent years, it appears that an inflation rate of 3 percent or a prediction that the 3 percent rate will be exceeded is cause for restrictive monetary pol ...
... policy has primarily aimed at controlling inflation. Given acceptable inflation rates, the Fed is willing to try to close a recessionary gap. In recent years, it appears that an inflation rate of 3 percent or a prediction that the 3 percent rate will be exceeded is cause for restrictive monetary pol ...
AP Macroeconomics
... Monetary policy • Contraction to fight inflation (higher interest rate) • Expansion to fight recession (lower interest rate) • Increasing the reserve requirement – Fed reduces the ability of the banking system to create money ...
... Monetary policy • Contraction to fight inflation (higher interest rate) • Expansion to fight recession (lower interest rate) • Increasing the reserve requirement – Fed reduces the ability of the banking system to create money ...
BEYOND THE WASHINGTON CONSENSUS
... •development warrants not doing more of the same thing more intensively, but diversification into producing things up in the ladder of industrialization (Rodrik, Ha Joon-Chang) ...
... •development warrants not doing more of the same thing more intensively, but diversification into producing things up in the ladder of industrialization (Rodrik, Ha Joon-Chang) ...
Inflation & Deflation
... leads to higher prices. MxV=PxQ M = money supply V = velocity P = price level Q = quantity of output ...
... leads to higher prices. MxV=PxQ M = money supply V = velocity P = price level Q = quantity of output ...
Economic Schools Classical
... and in the long run, markets will create full employment Neo-classical –trickle down theory will help the wealthy first, but will benefit all. Reagonomics in the 1980’s-lowered tax rates of the wealthy -- Why? ...
... and in the long run, markets will create full employment Neo-classical –trickle down theory will help the wealthy first, but will benefit all. Reagonomics in the 1980’s-lowered tax rates of the wealthy -- Why? ...
Macroeconomics
Macroeconomics (from the Greek prefix makro- meaning ""large"" and economics) is a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole, rather than individual markets. This includes national, regional, and global economies. With microeconomics, macroeconomics is one of the two most general fields in economics.Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price index, and the interrelations among the different sectors of the economy, to better understand how the whole economy functions. Macroeconomists develop models that explain the relationship between such factors as national income, output, consumption, unemployment, inflation, savings, investment, international trade and international finance. In contrast, microeconomics is primarily focused on the actions of individual agents, such as firms and consumers, and how their behavior determines prices and quantities in specific marketsWhile macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline: the attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income). Macroeconomic models and their forecasts are used by governments to assist in the development and evaluation of economic policy.