questions to the Lecture 5
... 12. What does the assumption of constant income velocity of money imply for the functional form of money demand function, as well as for determinants of inflation? 13. What interest rate do we take into consideration in money demand function and why? 14. Explain the idea behind portfolio theories of ...
... 12. What does the assumption of constant income velocity of money imply for the functional form of money demand function, as well as for determinants of inflation? 13. What interest rate do we take into consideration in money demand function and why? 14. Explain the idea behind portfolio theories of ...
Old Review for Exam 2
... niceties of section 7-1, but be aware of the nature of the relation and what determines the slope of the AS curve). What will happen to the AS or AD curve if any one of the following takes place: – less stringent antitrust enforcement – expected higher price level – increase in worker productivity – ...
... niceties of section 7-1, but be aware of the nature of the relation and what determines the slope of the AS curve). What will happen to the AS or AD curve if any one of the following takes place: – less stringent antitrust enforcement – expected higher price level – increase in worker productivity – ...
Bowling Green, Kentucky AP Macro Economics Summer Institute
... Gary N. Petmecky, Parkview High School, Lilburn, Ga [email protected] Tentative Syllabus Day 1 • Introductions/Experience/Expectations • What is the AP test? • Resources • Course overview: The Acorn Book; The AP exams: What to assign; How much can you expect to cover; Evaluation of te ...
... Gary N. Petmecky, Parkview High School, Lilburn, Ga [email protected] Tentative Syllabus Day 1 • Introductions/Experience/Expectations • What is the AP test? • Resources • Course overview: The Acorn Book; The AP exams: What to assign; How much can you expect to cover; Evaluation of te ...
Aggregate Supply
... b. Production Capacity: The max value of goods an economy is capable of producing given the available resources c. Full Capacity: Max value of Real GDP representing the most production possible in the economy. i. Max level of Real GDP is max level of production; ii. Because AS is measured as a level ...
... b. Production Capacity: The max value of goods an economy is capable of producing given the available resources c. Full Capacity: Max value of Real GDP representing the most production possible in the economy. i. Max level of Real GDP is max level of production; ii. Because AS is measured as a level ...
Final - Wofford
... why the aggregate quantity of output demanded changes between the short run and long run. Over time, as the misperceptions of the price level disappear, wages adjust, or prices adjust, the short-run aggregate-supply curve shifts up to AS2 and the economy gets to equilibrium at point C, with price le ...
... why the aggregate quantity of output demanded changes between the short run and long run. Over time, as the misperceptions of the price level disappear, wages adjust, or prices adjust, the short-run aggregate-supply curve shifts up to AS2 and the economy gets to equilibrium at point C, with price le ...
Chapter 13
... type of demand that was created is called Primary Demand or first time purchases. This caused the Aggregate Demand to increase. New industries were also developed during the twenties. These included automobiles, oil and gas, radio, electricity, roads, film, construction and telephone. New industries ...
... type of demand that was created is called Primary Demand or first time purchases. This caused the Aggregate Demand to increase. New industries were also developed during the twenties. These included automobiles, oil and gas, radio, electricity, roads, film, construction and telephone. New industries ...
If you were invited to give a talk to a group of citizens in Shanghai
... Kydland and Prescott(1977): the inability of policymakers to commit themselves to such a lowinflation policy can give rise to excessive inflation despite the absence of a long-run tradeoff. ...
... Kydland and Prescott(1977): the inability of policymakers to commit themselves to such a lowinflation policy can give rise to excessive inflation despite the absence of a long-run tradeoff. ...
Section 2 - What Are the Origins of Modern Fiscal and Monetary
... Employment, Interest, and Money, Keynes sought to explain why economies experience crises like a depression. He also discussed how political leaders could end the Great Depression and avoid similar crises in the future. Keynes’s basic idea was simple. During a recession, overall demand for goods and ...
... Employment, Interest, and Money, Keynes sought to explain why economies experience crises like a depression. He also discussed how political leaders could end the Great Depression and avoid similar crises in the future. Keynes’s basic idea was simple. During a recession, overall demand for goods and ...
Module 18 PowerPoint - Reading Community Schools
... in this Module: • How the aggregate supply curve illustrates the relationship between the aggregate price level and the quantity of aggregate output supplied in the economy • What factors can shift the aggregate supply curve ...
... in this Module: • How the aggregate supply curve illustrates the relationship between the aggregate price level and the quantity of aggregate output supplied in the economy • What factors can shift the aggregate supply curve ...
Revision – Demand-side and supply
... • reduction in trade union power • reduction in minimum wages (Note that the government would not actually have to reduce the nominal wage, it could just leave it at the same level. Inflation would erode the real value of the minimum wage) ...
... • reduction in trade union power • reduction in minimum wages (Note that the government would not actually have to reduce the nominal wage, it could just leave it at the same level. Inflation would erode the real value of the minimum wage) ...
AP Macroeconomics
... Monetary policy influences AD/AS by effecting interest rates. Higher interest rates decrease AD. Lower interest rates increase AD. Theory of rational expectations-Increasing the MS on its own doesn’t increase AD because if the inflation is ...
... Monetary policy influences AD/AS by effecting interest rates. Higher interest rates decrease AD. Lower interest rates increase AD. Theory of rational expectations-Increasing the MS on its own doesn’t increase AD because if the inflation is ...
Short-Run AS/AD Model Essentials
... Up to this point, our discussions of unemployment, inflation, output, and income have revolved around how we measure these indicators of economic performance. Now we want to focus on understanding how real-world events and government policy changes might change these measures of economic performance ...
... Up to this point, our discussions of unemployment, inflation, output, and income have revolved around how we measure these indicators of economic performance. Now we want to focus on understanding how real-world events and government policy changes might change these measures of economic performance ...
Aggregate Supply - Economics @ Tallis
... as full employment of resources is reached. • When output is low, forms can purchase more factors of production without raising their prices, so more can be produced without increasing average cost. • As output rises, firms start to compete for resources, their prices rise and the cost of production ...
... as full employment of resources is reached. • When output is low, forms can purchase more factors of production without raising their prices, so more can be produced without increasing average cost. • As output rises, firms start to compete for resources, their prices rise and the cost of production ...
Accelerated Macro Spring 2015 Solutions to HW #4 1
... For each of the following shocks, determine the effects of the policy prescribed by the Taylor Rule on the Federal Funds rate, output, and inflation. Would the policy reaction be stabilizing, destabilizing, or neutral relative to leaving the money supply unchanged after the shock? a. A temporary boo ...
... For each of the following shocks, determine the effects of the policy prescribed by the Taylor Rule on the Federal Funds rate, output, and inflation. Would the policy reaction be stabilizing, destabilizing, or neutral relative to leaving the money supply unchanged after the shock? a. A temporary boo ...
Slide 1 - The Citadel
... The simple RET model • Let us suppose we wish to forecast the rate of inflation p • We start with the assumption that economic agents use any and all information available to forecast next period’s inflation rate, which, it is assumed, has one unique value • If the forecast is unbiased then p = p* ...
... The simple RET model • Let us suppose we wish to forecast the rate of inflation p • We start with the assumption that economic agents use any and all information available to forecast next period’s inflation rate, which, it is assumed, has one unique value • If the forecast is unbiased then p = p* ...
Aggregate Demand Aggregate demand
... • Aggregate supply is the total supply of goods and services that firms in a national economy plan on selling during a specific time period. • It is the total amount of goods and services that firms are willing to sell at a given price ...
... • Aggregate supply is the total supply of goods and services that firms in a national economy plan on selling during a specific time period. • It is the total amount of goods and services that firms are willing to sell at a given price ...
Aggregate demand is the sum of all expenditure in the economy
... The aggregate demand curve describes the aggregate demand (overall level of spending) at different price levels. Traditionally the y-axis displayed price but current thinking has replaced this with inflation. This is because an actual fall in prices is unlikely and that central banks prefer to targe ...
... The aggregate demand curve describes the aggregate demand (overall level of spending) at different price levels. Traditionally the y-axis displayed price but current thinking has replaced this with inflation. This is because an actual fall in prices is unlikely and that central banks prefer to targe ...
Macroeconomics: BSc Year One The Monetarist View of Interest
... a period of lower interest rates, and the government seeks to repeat the process. This process, however, generates inflation, which may become expected as before, leading to no short-term benefits. Also, the IS curve will shift up, because P& e ¹ 0 , leading to a higher interest rate. The long run e ...
... a period of lower interest rates, and the government seeks to repeat the process. This process, however, generates inflation, which may become expected as before, leading to no short-term benefits. Also, the IS curve will shift up, because P& e ¹ 0 , leading to a higher interest rate. The long run e ...
Chapter 9: Introduction to Economic Fluctuations (A short Run Model
... production function (technology). In other words, only variation in real variables (supply shocks) can generate business cycle. The latest version of this kind of flexible-price model is called real business cycle theory. The classical model cannot explain the big depression in 1933 and great recess ...
... production function (technology). In other words, only variation in real variables (supply shocks) can generate business cycle. The latest version of this kind of flexible-price model is called real business cycle theory. The classical model cannot explain the big depression in 1933 and great recess ...
ECONOMICS FINAL EXAM REVIEW SHEET
... Name a tax that is progressive, based on ability to pay, and direct? Why is it necessary? Contrast progressive and regressive taxes. What is a proportional tax? What is the benefit principle of taxation? Why is it difficult to apply? When is a tax direct? When is a tax indirect? What is a sales tax? ...
... Name a tax that is progressive, based on ability to pay, and direct? Why is it necessary? Contrast progressive and regressive taxes. What is a proportional tax? What is the benefit principle of taxation? Why is it difficult to apply? When is a tax direct? When is a tax indirect? What is a sales tax? ...