14.02, Spring 2003 Problem Set 4: Open economy IS-LM
... (b) In an open economy IS-LM model with flexible exchange rates, a cut in taxes always leads to an increase in Y, an appreciation of the exchange rate and an increase in investment. (c) If the IS curve is very flat, an increase in the domestic money supply causes a small depreciation of the exchange ...
... (b) In an open economy IS-LM model with flexible exchange rates, a cut in taxes always leads to an increase in Y, an appreciation of the exchange rate and an increase in investment. (c) If the IS curve is very flat, an increase in the domestic money supply causes a small depreciation of the exchange ...
Colombia_en.pdf
... intervention interest rate until it stood at 3.25% in March 2013, where it has remained. These cuts have been passed on to the various lending rates, leading to brisk growth in the total loan portfolio (an average ...
... intervention interest rate until it stood at 3.25% in March 2013, where it has remained. These cuts have been passed on to the various lending rates, leading to brisk growth in the total loan portfolio (an average ...
FedViews
... Corporate profits have rebounded in the last two quarters, perhaps reflecting aggressive cost cutting more than top-line revenue growth. Nevertheless, equity analysts are projecting relatively respectable profit growth over the next four quarters. In response to corporate earnings announcements and ...
... Corporate profits have rebounded in the last two quarters, perhaps reflecting aggressive cost cutting more than top-line revenue growth. Nevertheless, equity analysts are projecting relatively respectable profit growth over the next four quarters. In response to corporate earnings announcements and ...
November 22, 2010
... consumers are not buying and because banks and other financial institutions are not ...
... consumers are not buying and because banks and other financial institutions are not ...
Monetary Policy - s3.amazonaws.com
... rate to ensure plenty of money was available for banks to meet their reserve requirements and still be able to extend loans. 4. As the financial crisis deepened and banks began to collapse, many banks became reluctant to borrow from the Fed, fearing lenders and stockholders would see such borrowing ...
... rate to ensure plenty of money was available for banks to meet their reserve requirements and still be able to extend loans. 4. As the financial crisis deepened and banks began to collapse, many banks became reluctant to borrow from the Fed, fearing lenders and stockholders would see such borrowing ...
14.02: Principles of Macroeconomics
... answers. Your score will largely reflect the quality and relevance of your explanation. 1. When the Fed carries out a contractionary open market operation, it raises the price of bonds, and lowers the output level. False. When the Fed carries out a contractionary open market operation, it basically ...
... answers. Your score will largely reflect the quality and relevance of your explanation. 1. When the Fed carries out a contractionary open market operation, it raises the price of bonds, and lowers the output level. False. When the Fed carries out a contractionary open market operation, it basically ...
Monetary Policy
... The newspapers usually get the rest correct, they define the “federal funds rate” as the interest rate that banks charge each other on overnight loans (When banks need quick money like this it’s usually keep their reserves sufficient). ...
... The newspapers usually get the rest correct, they define the “federal funds rate” as the interest rate that banks charge each other on overnight loans (When banks need quick money like this it’s usually keep their reserves sufficient). ...
Peru_en.pdf
... (off 5.2%) and manufacturing (down by 1.7%) and slower growth in construction, which expanded only 1% in the first three quarters of the year. Mining industry performance was affected above all by lowergrade output at Antamina and the repercussions of the fight against unregulated gold mines in the ...
... (off 5.2%) and manufacturing (down by 1.7%) and slower growth in construction, which expanded only 1% in the first three quarters of the year. Mining industry performance was affected above all by lowergrade output at Antamina and the repercussions of the fight against unregulated gold mines in the ...
PDF
... Some people tell me that this recovery is healthy in the sense that it is proceeding at a slow and manageable pace. I agree. It would be far more dangerous at this stage if we had too rapid a growth rate, because that would inevitably cause the economy to overheat and push up inflation and interest ...
... Some people tell me that this recovery is healthy in the sense that it is proceeding at a slow and manageable pace. I agree. It would be far more dangerous at this stage if we had too rapid a growth rate, because that would inevitably cause the economy to overheat and push up inflation and interest ...
What Have We Learned since October 1979?
... inflation rate would induce the central bank to adjust its policy rate by 150 basis points in the same direction, meaning that the real funds rate moves by 50 basis points in that direction. If α is not positive, the central bank would be allowing rising inflation to reduce the real federal funds ra ...
... inflation rate would induce the central bank to adjust its policy rate by 150 basis points in the same direction, meaning that the real funds rate moves by 50 basis points in that direction. If α is not positive, the central bank would be allowing rising inflation to reduce the real federal funds ra ...
A Few Thoughts on the Employment Numbers
... than expected, but the household survey was much weaker. In addition, Dr. John Hussman wrote a piece last week that I thought was one of his best, on liquidity traps and quantitative easing, and that’s included here, too. We are embarking on a course through uncharted waters. No one (including the F ...
... than expected, but the household survey was much weaker. In addition, Dr. John Hussman wrote a piece last week that I thought was one of his best, on liquidity traps and quantitative easing, and that’s included here, too. We are embarking on a course through uncharted waters. No one (including the F ...
Inflation or Deflation? - The International Economy
... and beyond, and that they also do not require higher interest In the current situation, the United States cannot reduce rates as compensation for the risk that the fiscal deficit will the real value of its government debt significantly by indulging cause real interest rates to rise in the future. ...
... and beyond, and that they also do not require higher interest In the current situation, the United States cannot reduce rates as compensation for the risk that the fiscal deficit will the real value of its government debt significantly by indulging cause real interest rates to rise in the future. ...
Free - 2010 Macro FRQ Click Here
... 1. (d) [2 pts] In order to finance the increase in government spending on national defense from part (b), the government borrows funds from the public. Using a correctly labeled graph of the loanable funds market, show the effect of the government’s borrowing on the real interest rate. (e) [2 pts] G ...
... 1. (d) [2 pts] In order to finance the increase in government spending on national defense from part (b), the government borrows funds from the public. Using a correctly labeled graph of the loanable funds market, show the effect of the government’s borrowing on the real interest rate. (e) [2 pts] G ...
a sample - Are you covered?
... • The effect of higher interest rates is not evenly spread. • Those consumers with large mortgages (often first time buyers in their 20s and 30s) will be disproportionately affected by rising interest rates. • For example, reducing inflation may require interest rates to rise to a level that cause r ...
... • The effect of higher interest rates is not evenly spread. • Those consumers with large mortgages (often first time buyers in their 20s and 30s) will be disproportionately affected by rising interest rates. • For example, reducing inflation may require interest rates to rise to a level that cause r ...
EPS Session4 2011
... 1. Define price stability. Why is attainment of price stability important? 2. What policy actions can a central bank take to prevent deflation? 3. Can the use of monetary policy on its own cure a recession? What are the limits to its effectiveness? 4. Q 3 p. 303 --- does business prefer rising price ...
... 1. Define price stability. Why is attainment of price stability important? 2. What policy actions can a central bank take to prevent deflation? 3. Can the use of monetary policy on its own cure a recession? What are the limits to its effectiveness? 4. Q 3 p. 303 --- does business prefer rising price ...
Demand for Loans Real Interest Rate
... for labor tend to be deflationary in the long-run. E) The natural rate of unemployment is independent of monetary and fiscal policy changes that affect aggregate demand. ...
... for labor tend to be deflationary in the long-run. E) The natural rate of unemployment is independent of monetary and fiscal policy changes that affect aggregate demand. ...
F Biggest danger is bank bashing
... unambiguous and overwhelming. There aggregate demand linkage are centuries of clear evidence for this – has been rather tight. We even though plenty of deniers of basic can also observe that the US remains in a growth principles remain in evidence recession. The economy bank money was much larger th ...
... unambiguous and overwhelming. There aggregate demand linkage are centuries of clear evidence for this – has been rather tight. We even though plenty of deniers of basic can also observe that the US remains in a growth principles remain in evidence recession. The economy bank money was much larger th ...
2012 - Canvas
... (b) Assume the Central Bank of Rankinland pursues an expansionary monetary policy. (i) Identify the open-market operation that the Central Bank would use. (ii) Draw a correctly labeled money market graph and show the short-run effect of the expansionary monetary policy on the nominal interest rate. ...
... (b) Assume the Central Bank of Rankinland pursues an expansionary monetary policy. (i) Identify the open-market operation that the Central Bank would use. (ii) Draw a correctly labeled money market graph and show the short-run effect of the expansionary monetary policy on the nominal interest rate. ...
Literacy Rate CLOZE Notes 1. A literate person is one who can _. 2
... 2. ___________________________is a major factor in whether a person can _________________ and be successful in the workplace. 3. Literacy rate is the percentage of a country’s population over the ___________________________ that can read and write. 4. Countries with high literacy rates are generally ...
... 2. ___________________________is a major factor in whether a person can _________________ and be successful in the workplace. 3. Literacy rate is the percentage of a country’s population over the ___________________________ that can read and write. 4. Countries with high literacy rates are generally ...
CHAPTER 5 Review - Nimantha Manamperi, PhD
... 20. During hyperinflation real tax revenue of the government often drops substantially because of the: A) delay between when a tax is levied and when it is collected. B) significantly greater menu costs of printing tax forms. C) additional deductions taken for increased shoeleather costs. D) greater ...
... 20. During hyperinflation real tax revenue of the government often drops substantially because of the: A) delay between when a tax is levied and when it is collected. B) significantly greater menu costs of printing tax forms. C) additional deductions taken for increased shoeleather costs. D) greater ...
Interest rate
An interest rate is the rate at which interest is paid by borrowers (debtors) for the use of money that they borrow from lenders (creditors). Specifically, the interest rate is a percentage of principal paid a certain number of times per period for all periods during the total term of the loan or credit. Interest rates are normally expressed as a percentage of the principal for a period of one year, sometimes they are expressed for different periods such as a month or a day. Different interest rates exist parallelly for the same or comparable time periods, depending on the default probability of the borrower, the residual term, the payback currency, and many more determinants of a loan or credit. For example, a company borrows capital from a bank to buy new assets for its business, and in return the lender receives rights on the new assets as collateral and interest at a predetermined interest rate for deferring the use of funds and instead lending it to the borrower.Interest-rate targets are a vital tool of monetary policy and are taken into account when dealing with variables like investment, inflation, and unemployment. The central banks of countries generally tend to reduce interest rates when they wish to increase investment and consumption in the country's economy. However, a low interest rate as a macro-economic policy can be risky and may lead to the creation of an economic bubble, in which large amounts of investments are poured into the real-estate market and stock market. In developed economies, interest-rate adjustments are thus made to keep inflation within a target range for the health of economic activities or cap the interest rate concurrently with economic growth to safeguard economic momentum.