SAMPLE EXAM QUESTIONS FOR FALL 2013 ECON3310
... Short questions: 4 out of 5 (40% of total marks) 1. Assume that the typical household behaves according to Irving Fisher's two-period model, that consumption in both periods is a normal good, and that households are initially savers. Illustrate graphically how a tax cut in period one affects consump ...
... Short questions: 4 out of 5 (40% of total marks) 1. Assume that the typical household behaves according to Irving Fisher's two-period model, that consumption in both periods is a normal good, and that households are initially savers. Illustrate graphically how a tax cut in period one affects consump ...
Workshop in economic terms
... A rate, typically stated as a percentage per year, charged on money borrowed or lent. It is the cost to use credit or money. It is determined by supply and demand for credit or available for borrowing. There are different kinds of interest rates such as the prime interest rate which is the rate bank ...
... A rate, typically stated as a percentage per year, charged on money borrowed or lent. It is the cost to use credit or money. It is determined by supply and demand for credit or available for borrowing. There are different kinds of interest rates such as the prime interest rate which is the rate bank ...
Debt_PPT-1192wvq
... • European governments have been able to offset this by issuing and buying bonds in the open market, leading to falling nominal interest rates (in the money market). • That encourages more borrowing, and interest rate volatility, raising the risk of default. • This has combined to result in a situat ...
... • European governments have been able to offset this by issuing and buying bonds in the open market, leading to falling nominal interest rates (in the money market). • That encourages more borrowing, and interest rate volatility, raising the risk of default. • This has combined to result in a situat ...
FRQ 2 1. Assume the US is operating normally: inflation is at 3
... 1. Assume the US is operating normally: inflation is at 3% annually and unemployment is at 5%. (a) Using a correctly labeled AS/AD graph, show the following: (i) Full-employment output (ii) Current output (iii) Current price level (b) If a hurricane struck the United States Gulf Coast and disrupted ...
... 1. Assume the US is operating normally: inflation is at 3% annually and unemployment is at 5%. (a) Using a correctly labeled AS/AD graph, show the following: (i) Full-employment output (ii) Current output (iii) Current price level (b) If a hurricane struck the United States Gulf Coast and disrupted ...
fiscal and monetary policy
... – Banks borrowing money from Fed to maintain their reserve requirement Interest rate is set by Fed at a discount for Banks – Low interest rate means more money to loan = more money in circulation – High interest rate = less money to loan, less money in circulation – Between 1990-2008, from 7% to 0 ...
... – Banks borrowing money from Fed to maintain their reserve requirement Interest rate is set by Fed at a discount for Banks – Low interest rate means more money to loan = more money in circulation – High interest rate = less money to loan, less money in circulation – Between 1990-2008, from 7% to 0 ...
5. Approaches to policy and macroeconomic context
... Keynes shifted macroeconomic thought from a focus on AS to AD. Keynesian economists emphasise the use of demand-side policies, fiscal and monetary, to close gaps between actual and potential output. The 2008 financial crisis caused an increase in popularity of Keynesian beliefs. Keynesians believe t ...
... Keynes shifted macroeconomic thought from a focus on AS to AD. Keynesian economists emphasise the use of demand-side policies, fiscal and monetary, to close gaps between actual and potential output. The 2008 financial crisis caused an increase in popularity of Keynesian beliefs. Keynesians believe t ...
Answers to the above Grand Synthesis PROB FOR 101
... Belmarks) in modern plant and equipment. What specific changes in taxes and monetary policy would you recommend to achieve this new growth without causing a demand-pull inflation? (4 pt) Now we need to encourage the borrowing and investing of 200 (million Belmarks) by companies. How do we do that. W ...
... Belmarks) in modern plant and equipment. What specific changes in taxes and monetary policy would you recommend to achieve this new growth without causing a demand-pull inflation? (4 pt) Now we need to encourage the borrowing and investing of 200 (million Belmarks) by companies. How do we do that. W ...
Dominican_Republic_en.pdf
... Consequently, in real terms, lending to the private sector was negative, a trend that only turned around in the fourth quarter of 2009. Annual growth of lending to the private sector is expected to remain modest compared with lending to the public sector, which grew by almost 19%. ...
... Consequently, in real terms, lending to the private sector was negative, a trend that only turned around in the fourth quarter of 2009. Annual growth of lending to the private sector is expected to remain modest compared with lending to the public sector, which grew by almost 19%. ...
OFFICIAL CASH RATE HOW DOES IT WORK?
... • When an OCR is announced - it is a percentage number – 7.25% • This means Reserve Bank undertakes to pay financial institutions an interest rate 0.25 per cent below the OCR for money deposited in Reserve Bank settlement accounts ie 7.00% • The Reserve Bank also undertakes to Lend overnight cash t ...
... • When an OCR is announced - it is a percentage number – 7.25% • This means Reserve Bank undertakes to pay financial institutions an interest rate 0.25 per cent below the OCR for money deposited in Reserve Bank settlement accounts ie 7.00% • The Reserve Bank also undertakes to Lend overnight cash t ...
How to conduct monetary policy
... discount rate plays a role in monetary policy because, traditionally, changes in the rate may have "announcement effects"—that is, they sometimes signal to markets a significant change in monetary policy. 2) How does monetary policy affect the economy? The point of implementing policy through raisin ...
... discount rate plays a role in monetary policy because, traditionally, changes in the rate may have "announcement effects"—that is, they sometimes signal to markets a significant change in monetary policy. 2) How does monetary policy affect the economy? The point of implementing policy through raisin ...
Eco 200 – Principles of Macroeconomics
... Chair of Board – 4-year term – does not coincide with President’s term – “second most powerful person in the U.S.” 12 District Banks – 9 person board (6 elected by members banks in the district, 3 appointed by Board of Governors) Federal Open Market Committee – 12 members (Board of Governors + 5 Dis ...
... Chair of Board – 4-year term – does not coincide with President’s term – “second most powerful person in the U.S.” 12 District Banks – 9 person board (6 elected by members banks in the district, 3 appointed by Board of Governors) Federal Open Market Committee – 12 members (Board of Governors + 5 Dis ...
Module Saving, Investment, and the Financial System
... by capital inflow are not equivalent. Investment spending financed by capital inflow comes at a higher national cost (the interest that must eventually be paid to a foreigner), than a dollar borrowed from national savings. ...
... by capital inflow are not equivalent. Investment spending financed by capital inflow comes at a higher national cost (the interest that must eventually be paid to a foreigner), than a dollar borrowed from national savings. ...
Formulas for Macro AP
... Real GDP = nominal GDP/price index Monetary multiplier = 1/RRR Total addition to banking system = 1st loan x money multiplier + initial deposit IF IT’S NEW $ • Amt. of $ a bank can loan = excess reserves = total reserves – (RRR x checkable deposits) • Real interest rate = nominal interest rate – exp ...
... Real GDP = nominal GDP/price index Monetary multiplier = 1/RRR Total addition to banking system = 1st loan x money multiplier + initial deposit IF IT’S NEW $ • Amt. of $ a bank can loan = excess reserves = total reserves – (RRR x checkable deposits) • Real interest rate = nominal interest rate – exp ...
Macroeconomics I Final exam: sample questions
... A. excess demand for goods and services B. excess supply of goods and services C. excess demand for money D. excess supply of Money 9. The AD-curve will shift to the right if A. government transfer payments are increased B. real money balances increase due to a decrease in the price level C. autonom ...
... A. excess demand for goods and services B. excess supply of goods and services C. excess demand for money D. excess supply of Money 9. The AD-curve will shift to the right if A. government transfer payments are increased B. real money balances increase due to a decrease in the price level C. autonom ...
2.2.
... Types of Interest Rates (cont.) The treasury bond rate is the yield on long-term (20 year) U.S. government debt obligations. The mortgage rate is the amount individuals pay to borrow for the purchase of a new home. The corporate bond rate is the cost of borrowing for large U.S. corporations. Th ...
... Types of Interest Rates (cont.) The treasury bond rate is the yield on long-term (20 year) U.S. government debt obligations. The mortgage rate is the amount individuals pay to borrow for the purchase of a new home. The corporate bond rate is the cost of borrowing for large U.S. corporations. Th ...
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.