Chapter 4
... Factor Price Equalization (cont.) • The model also ignores trade barriers and transportation costs, which may prevent output prices and factor prices from equalizing. • The model predicts outcomes for the long run, but after an economy liberalizes trade, factors of production may not quickly move t ...
... Factor Price Equalization (cont.) • The model also ignores trade barriers and transportation costs, which may prevent output prices and factor prices from equalizing. • The model predicts outcomes for the long run, but after an economy liberalizes trade, factors of production may not quickly move t ...
Matthew 0. Shapiro Working Paper No. 2146
... economy is subject to both aggregate supply and demand shocks. If the Keynesian view that demand factors are the major determinants of output fluctuations at business cycle frequencies is correct, then one would expect to see a positive correlation of price and quantity in the aggregate data. ...
... economy is subject to both aggregate supply and demand shocks. If the Keynesian view that demand factors are the major determinants of output fluctuations at business cycle frequencies is correct, then one would expect to see a positive correlation of price and quantity in the aggregate data. ...
Unit II - Cobb Learning
... • When the price of a good changes, the consumer experiences a substitution effect and an income effect. These two effects usually support each other and explain the law of demand. • Substitution Effect – When the price of a good falls, consumers will substitute toward that good and away from other ...
... • When the price of a good changes, the consumer experiences a substitution effect and an income effect. These two effects usually support each other and explain the law of demand. • Substitution Effect – When the price of a good falls, consumers will substitute toward that good and away from other ...
Practice test 3
... 10. The level of real GDP in the long run is called A) potential GDP. B) short run GDP. C) frictional GDP. D) low capacity GDP. 11. The short run aggregate supply curve has a A) negative slope. B) positive slope. C) slope equal to infinity. D) slope equal to zero. 12. If workers leave a country to s ...
... 10. The level of real GDP in the long run is called A) potential GDP. B) short run GDP. C) frictional GDP. D) low capacity GDP. 11. The short run aggregate supply curve has a A) negative slope. B) positive slope. C) slope equal to infinity. D) slope equal to zero. 12. If workers leave a country to s ...
No: 2007-05 27 February 2007 SUMMARY OF THE MONETARY POLICY COMMITTEE MEETING
... 19. The main risk to the mid-term inflation outlook is the possibility of higher-thanexpected downward persistence in inflation, manifested lately by the inertia in inflation expectations and services inflation. Although inflation expectations after worsening during the post-financial turbulence pe ...
... 19. The main risk to the mid-term inflation outlook is the possibility of higher-thanexpected downward persistence in inflation, manifested lately by the inertia in inflation expectations and services inflation. Although inflation expectations after worsening during the post-financial turbulence pe ...
Inflation and Types of Inflation
... when prices are pushed up by rising costs to producers who compete with each other for increasingly scarce resources. The increased costs are passed onto ...
... when prices are pushed up by rising costs to producers who compete with each other for increasingly scarce resources. The increased costs are passed onto ...
aggregate supply curve
... The period of time in which prices do not change or do not change very much. We call these prices “sticky”. • sticky prices If wages are sticky, firms’ overall costs will be sticky as well. Sticky wages cause sticky prices and hamper the economy’s ability to bring demand and supply into balance in t ...
... The period of time in which prices do not change or do not change very much. We call these prices “sticky”. • sticky prices If wages are sticky, firms’ overall costs will be sticky as well. Sticky wages cause sticky prices and hamper the economy’s ability to bring demand and supply into balance in t ...
Principles of Economics
... History of Macroeconomics In 1936, John Maynard Keynes published The General Theory of Employment, Interest, and Money. Keynes believed governments could intervene in the economy and affect the level of output and employment. Fine-tuning was the phrase used to refer to the government’s role in r ...
... History of Macroeconomics In 1936, John Maynard Keynes published The General Theory of Employment, Interest, and Money. Keynes believed governments could intervene in the economy and affect the level of output and employment. Fine-tuning was the phrase used to refer to the government’s role in r ...
Chapter 6: Prices and Decision Making
... cars and more smaller ones, leaving dealerships with huge inventories of gas guzzlers. At first, automakers thought the increase in gas prices would be temporary, so they were reluctant to switch over to smaller, more fuel-efficient models. As time went on, however, the surplus of unsold cars remain ...
... cars and more smaller ones, leaving dealerships with huge inventories of gas guzzlers. At first, automakers thought the increase in gas prices would be temporary, so they were reluctant to switch over to smaller, more fuel-efficient models. As time went on, however, the surplus of unsold cars remain ...
PDF
... ownership, and other factors that led to the associated economic decline. In an empirical study, Blanchard and Kremer have shown that aggregate output declined 40 to 70 percent in industries across the republics of the former Soviet Union over the 1989-1994 period, with the larger declines in sector ...
... ownership, and other factors that led to the associated economic decline. In an empirical study, Blanchard and Kremer have shown that aggregate output declined 40 to 70 percent in industries across the republics of the former Soviet Union over the 1989-1994 period, with the larger declines in sector ...
Criticisms of Aggregate Demand and Aggregate Supply
... Even more importantly, even if prices were to fall, this “deflation” would not increase AD and would not provide an unproblematic return to full employment output, but would instead be a disaster, especially for a heavily indebted economy, such as the U.S. economy. Falling prices would increase the ...
... Even more importantly, even if prices were to fall, this “deflation” would not increase AD and would not provide an unproblematic return to full employment output, but would instead be a disaster, especially for a heavily indebted economy, such as the U.S. economy. Falling prices would increase the ...
long-run aggregate supply curve
... stay there unless there are changes in the behavior of suppliers, households, firms, governments or the foreign sector. • If an economy is not in short-run equilibrium, the forces of aggregate demand and aggregate supply will cause the economy to move to equilibrium. ...
... stay there unless there are changes in the behavior of suppliers, households, firms, governments or the foreign sector. • If an economy is not in short-run equilibrium, the forces of aggregate demand and aggregate supply will cause the economy to move to equilibrium. ...
Nevada Agricultural Outlook, 2016
... movement over the outlook period, they will remain well above world market levels prior to 2006. Livestock prices, especially for cattle have peaked and are now on the downward arc of the cycle. These developments in agricultural markets are influenced by a number of major factors, both short term a ...
... movement over the outlook period, they will remain well above world market levels prior to 2006. Livestock prices, especially for cattle have peaked and are now on the downward arc of the cycle. These developments in agricultural markets are influenced by a number of major factors, both short term a ...
History of early price indices
... For an economy to increase the quantity of one good produced, production of the other good must be (2_________________). Let´s consider a hypothetical economy where butter production must be sacrificed in order to produce more guns. PPFs (3_______________) how much of the latter must be sacrificed f ...
... For an economy to increase the quantity of one good produced, production of the other good must be (2_________________). Let´s consider a hypothetical economy where butter production must be sacrificed in order to produce more guns. PPFs (3_______________) how much of the latter must be sacrificed f ...
AP Macro Unit 3 Review Powerpoint
... •Assume the Super Bowl comes to town and there is an increase of $100 in Ashley’s restaurant. •Ashley now has $100 more income. •She saves $50 and spends $50 at Carl’s Salon •Car now has $50 more income •He saves $25 and spends $25 at Dan’s fruit stand •Dan now has $25 more income. This continues un ...
... •Assume the Super Bowl comes to town and there is an increase of $100 in Ashley’s restaurant. •Ashley now has $100 more income. •She saves $50 and spends $50 at Carl’s Salon •Car now has $50 more income •He saves $25 and spends $25 at Dan’s fruit stand •Dan now has $25 more income. This continues un ...
Lecture 1: Introduction
... 8. A country’s standard of living depends upon its production power (productivity) 9. Prices rise when government prints too much money 10. Phillips curve – short run tradeoff between inflation and unemployment ...
... 8. A country’s standard of living depends upon its production power (productivity) 9. Prices rise when government prints too much money 10. Phillips curve – short run tradeoff between inflation and unemployment ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Import Competition and Response
... reducing the real product wage in that sector. If the nominal wage is downward sticky but prices are upward flexible, this could, in principle, be brought about by expansionary fiscal policy (coupled with a devaluation). Under certain conditions, however, even that may not be possible if it also ent ...
... reducing the real product wage in that sector. If the nominal wage is downward sticky but prices are upward flexible, this could, in principle, be brought about by expansionary fiscal policy (coupled with a devaluation). Under certain conditions, however, even that may not be possible if it also ent ...
Shifts in Aggregate Demand Page 1 of 2
... The first answer is an increase in autonomous spending. Autonomous means stuff that is by itself, unto itself, not caused by something else. If consumers decided that they just wanted to spend more money for the heck of it, or were feeling rich or confident about the future of the economy, then an i ...
... The first answer is an increase in autonomous spending. Autonomous means stuff that is by itself, unto itself, not caused by something else. If consumers decided that they just wanted to spend more money for the heck of it, or were feeling rich or confident about the future of the economy, then an i ...
Economic Survey
... a) using the maximum number of resources to produce goods and services. b) using resources in such a way as to maximize the production of goods and services. c) finding the most expensive, time-consuming way to produce a good or service. d) replacing old ways of producing goods and services with new ...
... a) using the maximum number of resources to produce goods and services. b) using resources in such a way as to maximize the production of goods and services. c) finding the most expensive, time-consuming way to produce a good or service. d) replacing old ways of producing goods and services with new ...
MEASURING THE PRICE LEVEL
... conducts a survey. They ask a sample of urban consumers to record and report their monthly purchases. The survey results are then used to construct the bundle of goods purchased by the typical survey respondent. The variety of goods included in the bundle is large, ranging from white cotton shirts t ...
... conducts a survey. They ask a sample of urban consumers to record and report their monthly purchases. The survey results are then used to construct the bundle of goods purchased by the typical survey respondent. The variety of goods included in the bundle is large, ranging from white cotton shirts t ...
1 - Finance
... good for which it has the lower opportunity cost in order to make the best use of available resources. By specializing in the production of a good for which a country has a comparative advantage and then trading for other desirable goods, a country is able to gain the greatest benefit from its avail ...
... good for which it has the lower opportunity cost in order to make the best use of available resources. By specializing in the production of a good for which a country has a comparative advantage and then trading for other desirable goods, a country is able to gain the greatest benefit from its avail ...
Chapter 29 Key Question Solutions
... equilibrium price level and level of real output. Assume that all other things remain constant. a. A widespread fear of depression on the part of consumers. b. A $2 increase in the excise tax on a pack of cigarettes. c. A reduction in interest rates at each price level. d. A major increase in Federa ...
... equilibrium price level and level of real output. Assume that all other things remain constant. a. A widespread fear of depression on the part of consumers. b. A $2 increase in the excise tax on a pack of cigarettes. c. A reduction in interest rates at each price level. d. A major increase in Federa ...
Oil Price and Economic Growth in Small Pacific Island Countries
... We proceed to examine whether there exists any long run equilibrium relationship between the variables under investigation. Towards this purpose, we resort to Pedroni [28-30] and Kao [31] panel cointegration tests. Pedroni considers seven different statistics, four of which are based on pooling the ...
... We proceed to examine whether there exists any long run equilibrium relationship between the variables under investigation. Towards this purpose, we resort to Pedroni [28-30] and Kao [31] panel cointegration tests. Pedroni considers seven different statistics, four of which are based on pooling the ...
Inflation. Unit 1. What is inflation? Reading
... sense to say that "inflation hurts everybody." On average, at least, we are no worse off when prices rise, since our (average) incomes increase at the same time. However in reality, some people's incomes rise faster than inflation while others' increase more slowly. ...
... sense to say that "inflation hurts everybody." On average, at least, we are no worse off when prices rise, since our (average) incomes increase at the same time. However in reality, some people's incomes rise faster than inflation while others' increase more slowly. ...
2000s commodities boom
The 2000s commodities boom or the commodities super cycle was the rise in many physical commodity prices (such as those of food stuffs, oil, metals, chemicals, fuels and the like) which occurred during the decade of the 2000s (2000–2009), following the Great Commodities Depression of the 1980s and 1990s. The boom was largely due to the rising demand from emerging markets such as the BRIC countries, as well as the result of concerns over long-term supply availability. There was a sharp down-turn in prices during 2008 and early 2009 as a result of the credit crunch and sovereign debt crisis, but prices began to rise as demand recovered from late 2009 to mid-2010. Oil began to slip downwards after mid-2010, but peaked at $101.80 on 30 and 31 January 2011, as then Egyptian political crisis and rioting broke out, leading to concerns over both the safe use of the Suez Canal and over all security in Arabia itself. On 3 March, Libya's National Oil Corp said that output had halved due to the departure of foreign workers. As this happened, Brent Crude surged to a new high of above $116.00 a barrel as supply disruptions and potential for more unrest in the Middle East and North Africa continued to worry investors. Thus the price of oil kept rising into the 2010s. The commodities super-cycle peaked in 2011, ""driven by a combination of strong demand from emerging nations and low supply growth."" Prior to 2002, only 5 to 10 per cent of trading in the commodities market was attributable to investors. Since 2002 ""30 per cent of trading is attributable to investors in the commodities market"" which ""has caused higher price volatility.""