Ch09.pps
... Short-run fluctuations in output and employment are called the business cycle. In previous modules, we developed theories to explain how the economy behaves in the long run. Those theories were based on the classical dichotomy-- the premise that real variables, such as output and employment, are no ...
... Short-run fluctuations in output and employment are called the business cycle. In previous modules, we developed theories to explain how the economy behaves in the long run. Those theories were based on the classical dichotomy-- the premise that real variables, such as output and employment, are no ...
Macro 3 Exercise #2 Answers
... pursued an expansionary policy, so why did the economy contract? The supply shock caused a contraction. This more than offset the effects of the expansionary policy on output and on unemployment. However, the inward shift in supply made the price level go up even more. Is the government administrati ...
... pursued an expansionary policy, so why did the economy contract? The supply shock caused a contraction. This more than offset the effects of the expansionary policy on output and on unemployment. However, the inward shift in supply made the price level go up even more. Is the government administrati ...
Chapter 23. Aggregate Supply and Demand, the Growth Diamond
... The holy grail of economic growth theory is to figure out how to shift Ynrl to the right because, if policymakers can do that, it doesn’t matter how short the long term is. Policymakers can make a difference—and for the better. The real business cycle theory of Edward Prescott suggests that real agg ...
... The holy grail of economic growth theory is to figure out how to shift Ynrl to the right because, if policymakers can do that, it doesn’t matter how short the long term is. Policymakers can make a difference—and for the better. The real business cycle theory of Edward Prescott suggests that real agg ...
FRBSF E L CONOMIC ETTER
... with some notable exceptions, corporate debt, commercial real estate, and residential mortgages. One reason that risk premiums may be low is precisely because the environment is less risky: the volatility of output and inflation has declined substantially in most industrial countries since the mid-1 ...
... with some notable exceptions, corporate debt, commercial real estate, and residential mortgages. One reason that risk premiums may be low is precisely because the environment is less risky: the volatility of output and inflation has declined substantially in most industrial countries since the mid-1 ...
Shanghai American School
... their prices will be bid up and, therefore, producer costs rise. >>Vertical range: where absolute full capacity is assumed, and any attempt to increase output will bid up resource and product prices. We assume full-employment occurs at the “natural rate of unemployment.” 20-35 minutes: Lecture - Det ...
... their prices will be bid up and, therefore, producer costs rise. >>Vertical range: where absolute full capacity is assumed, and any attempt to increase output will bid up resource and product prices. We assume full-employment occurs at the “natural rate of unemployment.” 20-35 minutes: Lecture - Det ...
QUIZ 2: Macro – Winter 2010 Name: Section Registered: Campus
... The way the Fed will usually fight high real interest rates is to lower nominal rates. But, when nominal rates are close to zero and there is deflation, it becomes harder for the Fed to stimulate the economy by lowering real rates. Question 3 (4 points): In this class, we assume the Cobb-Douglas pro ...
... The way the Fed will usually fight high real interest rates is to lower nominal rates. But, when nominal rates are close to zero and there is deflation, it becomes harder for the Fed to stimulate the economy by lowering real rates. Question 3 (4 points): In this class, we assume the Cobb-Douglas pro ...
how complicated does the model have to be?
... differently. Let me give my own version. As I see it, the effort to put micro-foundations beneath aggregate supply went through four stages. (i) The Natural-rate Hypothesis When macroeconomists first began thinking seriously about why nominal shocks really have real effects, they were led into a var ...
... differently. Let me give my own version. As I see it, the effort to put micro-foundations beneath aggregate supply went through four stages. (i) The Natural-rate Hypothesis When macroeconomists first began thinking seriously about why nominal shocks really have real effects, they were led into a var ...
Aggregate Supply
... • To Analyze changes in real GDP & price level simultaneously • Provides insights on inflation, unemployment, & economic growth • Aggregate Demand – Amounts of real output – Buyers collectively desire – At each possible price level ...
... • To Analyze changes in real GDP & price level simultaneously • Provides insights on inflation, unemployment, & economic growth • Aggregate Demand – Amounts of real output – Buyers collectively desire – At each possible price level ...
NBER WORKING PAPER SERIES RECENT DEVELOPMENTS A VERY QUICK REFRESHER COURSE
... Edmund Phelps (1968). According to the unadorned Phillips curve, one could maintain a permanently low level of unemployment merely ...
... Edmund Phelps (1968). According to the unadorned Phillips curve, one could maintain a permanently low level of unemployment merely ...
Chapter 17: Stabilizing the National Economy
... inflation and low economic activity is sometimes called stagflation. According to some economists, stagflation is a result of cost-push inflation at work in the economy. The theory of cost-push inflation states that the wage demands of labor unions and the excessive profit motive of large corporatio ...
... inflation and low economic activity is sometimes called stagflation. According to some economists, stagflation is a result of cost-push inflation at work in the economy. The theory of cost-push inflation states that the wage demands of labor unions and the excessive profit motive of large corporatio ...
File
... will produce the full-employment output level no matter what the price level is • The explanation lies in the fact that in the long run when both input prices as well as output prices are flexible, profit levels will always adjust so as to give firms exactly the right profit incentive to produce exa ...
... will produce the full-employment output level no matter what the price level is • The explanation lies in the fact that in the long run when both input prices as well as output prices are flexible, profit levels will always adjust so as to give firms exactly the right profit incentive to produce exa ...
INFLATION Inflation is defined as the steady and persistent rise in
... Money saved at times when money bought more but now ends up buying less, discourages saving. When individuals in an economy would rather buy “inflation-proof” assets such as antiques rather than save money, this inhibits economic growth. Less savings leads to less money being available to buy new ca ...
... Money saved at times when money bought more but now ends up buying less, discourages saving. When individuals in an economy would rather buy “inflation-proof” assets such as antiques rather than save money, this inhibits economic growth. Less savings leads to less money being available to buy new ca ...
Macro2 Exercise #2 Answers
... What has happened to real GDP? It has gone down. What has happened to the unemployment rate? It has gone up. What has happened to inflation? It has gone down. What has happened to the real interest rate? It has gone down. What is the difference between the real and the nominal interest rate? The rea ...
... What has happened to real GDP? It has gone down. What has happened to the unemployment rate? It has gone up. What has happened to inflation? It has gone down. What has happened to the real interest rate? It has gone down. What is the difference between the real and the nominal interest rate? The rea ...
Classical economists assume that ______.
... According to Hume, in the short run, an increase in the money supply will ________, and in the long run, an increase in the money supply will _________. ...
... According to Hume, in the short run, an increase in the money supply will ________, and in the long run, an increase in the money supply will _________. ...
Introduction to Economic Fluctuations
... In the long run, prices are flexible and can respond to changes in supply or demand. In the short run, many prices are “sticky” at some predetermined level. Because prices behave differently in the short run than in the long run, economic policies have different effects over different time horizons. ...
... In the long run, prices are flexible and can respond to changes in supply or demand. In the short run, many prices are “sticky” at some predetermined level. Because prices behave differently in the short run than in the long run, economic policies have different effects over different time horizons. ...
Mankiw 5/e Chapter 13: Aggregate Supply
... Our analysis of the costs of disinflation, and of economic fluctuations in the preceding chapters, is based on the natural rate hypothesis: ...
... Our analysis of the costs of disinflation, and of economic fluctuations in the preceding chapters, is based on the natural rate hypothesis: ...
Overview of Inflation
... has actually increased because your friend paid you back more than enough to compensate for the inflation. Note: When actual inflation is below expected inflation, the lender (in this case you) gains and the borrower loses. Scenario 3: you expected 5% inflation and you experienced 8% inflation. Y ...
... has actually increased because your friend paid you back more than enough to compensate for the inflation. Note: When actual inflation is below expected inflation, the lender (in this case you) gains and the borrower loses. Scenario 3: you expected 5% inflation and you experienced 8% inflation. Y ...