Document
... Cost-push inflation: inflation created when an increase in the cost of production (wages or raw materials) shifts the short-run AS curve to the left; tends to push prices up while reducing the level of real GDP at the same time (stagflation) Demand-pull inflation: inflation that follows from an incr ...
... Cost-push inflation: inflation created when an increase in the cost of production (wages or raw materials) shifts the short-run AS curve to the left; tends to push prices up while reducing the level of real GDP at the same time (stagflation) Demand-pull inflation: inflation that follows from an incr ...
Unemployment & CPI
... Occurs when producers raise prices in order to meet increased costs Factors of production increase (commonly labor) which forces prices to rise. ...
... Occurs when producers raise prices in order to meet increased costs Factors of production increase (commonly labor) which forces prices to rise. ...
Ch13
... Theory #1: Sticky Price Model Those firms that will follow the equation p P (Y Y ) will be able to alter their prices as P and Y changes. These are the flexible price firms. Other firms will set their prices for a longer period and pick the expected price when the economy is at long term eq ...
... Theory #1: Sticky Price Model Those firms that will follow the equation p P (Y Y ) will be able to alter their prices as P and Y changes. These are the flexible price firms. Other firms will set their prices for a longer period and pick the expected price when the economy is at long term eq ...
Presentation by IBEC Large Energy Users Delegation
... – complex structure, cost base, regulated tariff formula 25% increase 2005/6 ...
... – complex structure, cost base, regulated tariff formula 25% increase 2005/6 ...
Macroeconomic Theory Spring 2010 M. Finkler Midterm Exam #1
... 5. Model 1 features the neutrality of money. Explain what that means for how changes in the stock of money affect GDP, employment, wages, prices, and interest rates. Is the Fisher effect part of the explanation? If so, explain why? If not, explain, why not. 6. Substitution effects are important in t ...
... 5. Model 1 features the neutrality of money. Explain what that means for how changes in the stock of money affect GDP, employment, wages, prices, and interest rates. Is the Fisher effect part of the explanation? If so, explain why? If not, explain, why not. 6. Substitution effects are important in t ...
ECON366 - KONSTANTINOS KANELLOPOULOS
... 2. Comment on the following statement: “If we assume that people have rational expectations, then fiscal policy is always irrelevant. But monetary policy can still be used to affect the rate of inflation and unemployment.” Individuals and firms with rational expectations consistently make optimal de ...
... 2. Comment on the following statement: “If we assume that people have rational expectations, then fiscal policy is always irrelevant. But monetary policy can still be used to affect the rate of inflation and unemployment.” Individuals and firms with rational expectations consistently make optimal de ...
Macroeconomics VII: Aggregate Supply
... • If prices rise unexpectedly, firms offer higher nominal wages but workers mistake these higher nominal offers for higher real wages, and so offer more labour. • At every real wage, workers supply more labour because they think the real wage is higher than it actually is. • Eventually workers reali ...
... • If prices rise unexpectedly, firms offer higher nominal wages but workers mistake these higher nominal offers for higher real wages, and so offer more labour. • At every real wage, workers supply more labour because they think the real wage is higher than it actually is. • Eventually workers reali ...
ExamView - Quiz # 2.tst
... 9. In computing the consumer price index, a base year is chosen. Which of the following statements about the base year is correct? a. The base year is always the first year among the years for which computations are being made. b. It is necessary to designate a base year only in the simplest case of ...
... 9. In computing the consumer price index, a base year is chosen. Which of the following statements about the base year is correct? a. The base year is always the first year among the years for which computations are being made. b. It is necessary to designate a base year only in the simplest case of ...
Aplia Test #1 Which of the following best describes the key
... Cyclical unemployment is best defined as Unemployment as a result of a downturn in the business cycle ...
... Cyclical unemployment is best defined as Unemployment as a result of a downturn in the business cycle ...
weekly article inflation
... This article talks about the overall inflation in the US, even with the considerable drop in gas prices. Inflation has picked up in October of 2014, especially noticeable in items like automobiles, pork, beef, pharmaceuticals, and electric power. Prices in items like pork have risen 8.1%. This is al ...
... This article talks about the overall inflation in the US, even with the considerable drop in gas prices. Inflation has picked up in October of 2014, especially noticeable in items like automobiles, pork, beef, pharmaceuticals, and electric power. Prices in items like pork have risen 8.1%. This is al ...
keynesian economics
... • Wages are sticky in the downward direction • wage contracts are typically adjusted no more than once a year • Union pressure to maintain/increase wages • a reluctance to threaten company morale • Even if wages were lowered, this would lower worker’s incomes, consequently lowering their spending on ...
... • Wages are sticky in the downward direction • wage contracts are typically adjusted no more than once a year • Union pressure to maintain/increase wages • a reluctance to threaten company morale • Even if wages were lowered, this would lower worker’s incomes, consequently lowering their spending on ...
Chapter 13: Macroeconomics
... Purchasing power goes down. Nations output might not change, GDP takes inflation into account. Deflation- prolonged decline in prices Rarely has happened in modern times. ...
... Purchasing power goes down. Nations output might not change, GDP takes inflation into account. Deflation- prolonged decline in prices Rarely has happened in modern times. ...
Test 1
... 3. During the Great Inflation of the 1970s, (a) the growth rates of M1 and M2 were higher than previously, and (b) the growth rate of M2 was much higher than the growth rate of M1. Explain how the high inflation of the decade relates to each of these facts. By the quantity theory of money, rapid gro ...
... 3. During the Great Inflation of the 1970s, (a) the growth rates of M1 and M2 were higher than previously, and (b) the growth rate of M2 was much higher than the growth rate of M1. Explain how the high inflation of the decade relates to each of these facts. By the quantity theory of money, rapid gro ...
Deflation Coming - Federal Reserve Bank of St. Louis
... To begin with, disinflation, which has been seen in the United States for the past few years, is not the same as deflation. The latter is an ongoing decrease in the aggregate price level—the opposite of inflation. The former occurs when the price index rises at a slower rate—for example, 2 percent i ...
... To begin with, disinflation, which has been seen in the United States for the past few years, is not the same as deflation. The latter is an ongoing decrease in the aggregate price level—the opposite of inflation. The former occurs when the price index rises at a slower rate—for example, 2 percent i ...
summary of learning goals
... cyclical, and seasonal. With price stability, the overall prices of goods and services are not moving very much either up or down. ...
... cyclical, and seasonal. With price stability, the overall prices of goods and services are not moving very much either up or down. ...
What is Macroeconomics? - The Bronx High School of Science
... • Supply-Side Policies – use tax system to increase production – trickle down economics ...
... • Supply-Side Policies – use tax system to increase production – trickle down economics ...
Chapter 13.2 GDP & Changes in the Price Level
... Warm-Up: What do you think the picture means? Explain. ...
... Warm-Up: What do you think the picture means? Explain. ...
Inflationary and Recessionary Gaps
... Short run equilibrium may differ from Long Run macroeconomic SR: period of time when prices of final g&s change, but factor prices do not – so final prices are in equilibrium, but factor prices are not macroeconomic LR: period of time when factor prices do adjust to final prices, AS=AD at full e ...
... Short run equilibrium may differ from Long Run macroeconomic SR: period of time when prices of final g&s change, but factor prices do not – so final prices are in equilibrium, but factor prices are not macroeconomic LR: period of time when factor prices do adjust to final prices, AS=AD at full e ...
Macroeconomic Stabilization via Fiscal Policy? Narayana Kocherlakota University of Rochester April 1, 2016
... • Issue: current outcomes are highly sensitive to shocks to expectations about LR. – Purely real models ignore this issue. – BUT: sensitivity is nearly infinite for models in which prices are nearly fully flexible. ...
... • Issue: current outcomes are highly sensitive to shocks to expectations about LR. – Purely real models ignore this issue. – BUT: sensitivity is nearly infinite for models in which prices are nearly fully flexible. ...
Intermediate Macroeconomics - College of Business and Economics
... Profit-maximization results in all firms reducing prices and therefore costs of inputs fall. MC decline, leading to further P declines and real money balances increase. Real interest rate falls, AD increases, and full employment is re-established. ...
... Profit-maximization results in all firms reducing prices and therefore costs of inputs fall. MC decline, leading to further P declines and real money balances increase. Real interest rate falls, AD increases, and full employment is re-established. ...