English title
... Describes behavior of the central bank Reacts when inflation deviates from the price stability Smoothes its reaction to inflation or the output gap (uncertainty about real-time estimates of output gap) Takes into account real economic activity Policy shocks Neutral nominal rate = trend r ...
... Describes behavior of the central bank Reacts when inflation deviates from the price stability Smoothes its reaction to inflation or the output gap (uncertainty about real-time estimates of output gap) Takes into account real economic activity Policy shocks Neutral nominal rate = trend r ...
Chapter 7
... • Reserve requirement: Increasing (decreasing) required percentage reduces (raises) amount of money supported by given reserve base. • Open market operations: Fed purchases (sales) of government securities increase (decrease) bank deposits available to support money supply. • Discount loans: Increas ...
... • Reserve requirement: Increasing (decreasing) required percentage reduces (raises) amount of money supported by given reserve base. • Open market operations: Fed purchases (sales) of government securities increase (decrease) bank deposits available to support money supply. • Discount loans: Increas ...
Answer Key
... domestic interest rates as holders of domestic currency bonds demand high interest rates to hold an asset whose currency will be devalued. This will have a negative impact on demand for investment. When the exchange rate does devalue, the IS curve will shift out as domestic goods become more competi ...
... domestic interest rates as holders of domestic currency bonds demand high interest rates to hold an asset whose currency will be devalued. This will have a negative impact on demand for investment. When the exchange rate does devalue, the IS curve will shift out as domestic goods become more competi ...
AP Macro Review PP
... Current Output - Potential Output Output Gap = x 100 Potential Output If positive = Inflationary Gap If negative = Recessionary Gap ...
... Current Output - Potential Output Output Gap = x 100 Potential Output If positive = Inflationary Gap If negative = Recessionary Gap ...
Econ152-11 Introduction to Macroeconomics Instructor: Leo
... 7) The GDP deflator measures a. the price level. b. the quantity level. c. real GDP. d. nominal GDP. e. the quality of the goods and services in GDP. 8) Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate? a. The real inter ...
... 7) The GDP deflator measures a. the price level. b. the quantity level. c. real GDP. d. nominal GDP. e. the quality of the goods and services in GDP. 8) Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate? a. The real inter ...
總體經濟學 期中考 日期：95
... is national income and i is the nominal interest rate. The real interest rate r is fixed at 4 percent by the investment and saving functions. The expected inflation rate equals the rate of nominal money growth. a. If Y is 1,000, M is 100, and the growth rate of nominal money is 1 percent, what must ...
... is national income and i is the nominal interest rate. The real interest rate r is fixed at 4 percent by the investment and saving functions. The expected inflation rate equals the rate of nominal money growth. a. If Y is 1,000, M is 100, and the growth rate of nominal money is 1 percent, what must ...
The Great Depression
... Oct-Dec 1929: S&P 500 fell 17% Oct 1929-Dec 1933: S&P 500 fell 71% 2. Drop in investment “correction” after overbuilding in the 1920s widespread bank failures made it harder to obtain financing for investment ...
... Oct-Dec 1929: S&P 500 fell 17% Oct 1929-Dec 1933: S&P 500 fell 71% 2. Drop in investment “correction” after overbuilding in the 1920s widespread bank failures made it harder to obtain financing for investment ...
Money, output and Prices in LR Macro_Module_32 money
... Short-Run and Long-Run Effects of an Increase in the Money Supply Increases in the money supply initially lead to an increase in output, but in the long run increased nominal wages reduce SRAS and lead only to an increased price level. ...
... Short-Run and Long-Run Effects of an Increase in the Money Supply Increases in the money supply initially lead to an increase in output, but in the long run increased nominal wages reduce SRAS and lead only to an increased price level. ...
Mexico_en.pdf
... Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. a Preliminary estimates. b Twelve-month variation to November 2011. c Average wages declared by workers covered by social security. d Estimate based on data from January to September. e Tw ...
... Source: Economic Commission for Latin America and the Caribbean (ECLAC), on the basis of official figures. a Preliminary estimates. b Twelve-month variation to November 2011. c Average wages declared by workers covered by social security. d Estimate based on data from January to September. e Tw ...
... slower pace of expansion owing to a less buoyant external sector was offset partially by domestic demand. According to official estimates, the central government deficit after grants will end the year at around 0.8% of GDP, half a percentage point higher than in 2014, while the balance-of-payments c ...
File
... the inflation rate should decline. D) the unemployment rate may increase. 3. Of the following groups, who would be the most impacted by inflation? A) members of strong labor unions B) people who do not have any debt C) employees who have received raises D) individuals living on fixed incomes 4. Whic ...
... the inflation rate should decline. D) the unemployment rate may increase. 3. Of the following groups, who would be the most impacted by inflation? A) members of strong labor unions B) people who do not have any debt C) employees who have received raises D) individuals living on fixed incomes 4. Whic ...
FedViews
... proved to be reasonably on target, but the unemployment rate rose far more than we had expected. According to currently available data, real GDP growth was close to zero last year, with a sharp contraction in the first half of the year offsetting strong positive growth in the second half. Based on p ...
... proved to be reasonably on target, but the unemployment rate rose far more than we had expected. According to currently available data, real GDP growth was close to zero last year, with a sharp contraction in the first half of the year offsetting strong positive growth in the second half. Based on p ...
Unemployment since 2000 GDP growth Inflation since 1920 UK
... A prime target of macroeconomic policy is the rate of inflation (the rate of change of the consumer price index). Figure 3 shows the time path for this since 2004. The government has set a target for the inflation rate of 2% per annum, and the Monetary Policy Committee of the Bank of England has res ...
... A prime target of macroeconomic policy is the rate of inflation (the rate of change of the consumer price index). Figure 3 shows the time path for this since 2004. The government has set a target for the inflation rate of 2% per annum, and the Monetary Policy Committee of the Bank of England has res ...
14.02 Principles of Macroeconomics Spring 06 Quiz 1
... c0 , c1 , b0 , b1 , b2 , d0 , d1 are positive constants, and c1 + b1 < 1. The price level is given. So are G and T . The central bank chooses the money stock M so as to achieve a given interest rate i0 (in other words, the money stock is endogenous). Note: For all questions, assume that the central ...
... c0 , c1 , b0 , b1 , b2 , d0 , d1 are positive constants, and c1 + b1 < 1. The price level is given. So are G and T . The central bank chooses the money stock M so as to achieve a given interest rate i0 (in other words, the money stock is endogenous). Note: For all questions, assume that the central ...
Institute of Business Management Semester II Course Instructor
... Q#3 a) What determines the position of the FE line? Give two examples of changes in the economy that would shift the FE line to the right. b). What relationship does the IS curve capture? Derive the IS curve graphically and show why it slopes as it does. Give two examples of changes in the economy t ...
... Q#3 a) What determines the position of the FE line? Give two examples of changes in the economy that would shift the FE line to the right. b). What relationship does the IS curve capture? Derive the IS curve graphically and show why it slopes as it does. Give two examples of changes in the economy t ...
(a) Which case gives rise to more inflation, a steep aggregate supply
... 1. (a) Which case gives rise to more inflation, a steep aggregate supply curve or a flat one? (b) What happens to the income multiplier if the aggregate supply curve is vertical? (c) What happens to the income multiplier if the aggregate supply curve is horizontal? (a) A steeper aggregate supply cur ...
... 1. (a) Which case gives rise to more inflation, a steep aggregate supply curve or a flat one? (b) What happens to the income multiplier if the aggregate supply curve is vertical? (c) What happens to the income multiplier if the aggregate supply curve is horizontal? (a) A steeper aggregate supply cur ...
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.