short-run aggregate supply curve
... The Aggregate Supply Curve • The aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy. ...
... The Aggregate Supply Curve • The aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy. ...
IS-LM
... 1973–1974 oil price shock (though it did during the 1979–1980 shock) • It could be that people expected the 1973–1974 oil price shock to be permanent • In that case the real interest rate would not necessarily rise • If so, people’s expectations were correct, since the 1973–1974 shock seems to have ...
... 1973–1974 oil price shock (though it did during the 1979–1980 shock) • It could be that people expected the 1973–1974 oil price shock to be permanent • In that case the real interest rate would not necessarily rise • If so, people’s expectations were correct, since the 1973–1974 shock seems to have ...
subject economics - Kendriya Vidyalaya CRPF Durgapur, West Bengal
... Ans: - Marginal Rate of Substitution (MRS) - The amount of other commodity which has been sacrificed (given up) in order to consume an additional unit of a commodity is called marginal rate of substitution. 13. What do you mean by Indifference curve? State its main Features. Ans: - Indifference curv ...
... Ans: - Marginal Rate of Substitution (MRS) - The amount of other commodity which has been sacrificed (given up) in order to consume an additional unit of a commodity is called marginal rate of substitution. 13. What do you mean by Indifference curve? State its main Features. Ans: - Indifference curv ...
Introductory Macroeconomics - General Guide To Personal and
... of the supply and demand of fiat money (coins and bank notes). However, things are more complicated than this because other financial assets, such as government bonds or corporate equity, are substitutes for money. So, in order to model the money market we must model their effect on it. Also, money ...
... of the supply and demand of fiat money (coins and bank notes). However, things are more complicated than this because other financial assets, such as government bonds or corporate equity, are substitutes for money. So, in order to model the money market we must model their effect on it. Also, money ...
12 INFLATION, JOBS, AND THE BUSINESS CYCLE*
... PHILLIPS CURVE : The Phillips curve and the AS/AD model are closely linked. Consider an unexpected increase in aggregate demand. In the short run, a movement occurs along the SAS curve. The price level rises and real GDP increases above potential GDP. The rise in the price level means that inflation ...
... PHILLIPS CURVE : The Phillips curve and the AS/AD model are closely linked. Consider an unexpected increase in aggregate demand. In the short run, a movement occurs along the SAS curve. The price level rises and real GDP increases above potential GDP. The rise in the price level means that inflation ...
Optimal Monetary Policy in a Currency Area
... study the important role of relative prices. When different regions experience asymmetric shocks, movements in the terms of trade are important in explaining the transmission mechanism of monetary policy. The normative results are rooted in the analysis of the existing distortions. In our framework t ...
... study the important role of relative prices. When different regions experience asymmetric shocks, movements in the terms of trade are important in explaining the transmission mechanism of monetary policy. The normative results are rooted in the analysis of the existing distortions. In our framework t ...
A Dynamic Model of Aggregate Demand and Aggregate Supply
... period of time and then returns to zero. The DAS curve will shift to the left in period t by exactly the amount of the shock. The DAD curve will remain unchanged. Inflation rises and output falls in period t. These effects reflect in part the response of the central bank through its policy rule that ...
... period of time and then returns to zero. The DAS curve will shift to the left in period t by exactly the amount of the shock. The DAD curve will remain unchanged. Inflation rises and output falls in period t. These effects reflect in part the response of the central bank through its policy rule that ...
Money Overhang, Credit Overhang and Financial Imbalances in the
... percent per year in the first years of ECB operation but without noticeable effects on inflation or inflationary expectations. It definitely contributed to the ECB decision to lower the weight of the monetary pillar in its decision-making process. Why did M3 grew faster than the ECB thought it shoul ...
... percent per year in the first years of ECB operation but without noticeable effects on inflation or inflationary expectations. It definitely contributed to the ECB decision to lower the weight of the monetary pillar in its decision-making process. Why did M3 grew faster than the ECB thought it shoul ...
Inflation: Its Causes and Cures Inflation • Introduction
... Inflation • CASE STUDY: Why Inflation Declined in the 1980s and 1990s (continued) – Disinflation and the Revival of Inflation During the 1982-90 Expansion • Introduction of fiscal expansion • Re-acceleration in nominal GDP growth • Oil prices fell sharply in 1986 ...
... Inflation • CASE STUDY: Why Inflation Declined in the 1980s and 1990s (continued) – Disinflation and the Revival of Inflation During the 1982-90 Expansion • Introduction of fiscal expansion • Re-acceleration in nominal GDP growth • Oil prices fell sharply in 1986 ...
Is Numérairology the Future of Monetary Economics?
... addition money wages or prices were sticky in terms of the bread numéraire, the bakers’ guild would have a non-trivial monetary stabilisation policy role. The welfare significance of the numéraire when there are nominal wage or price rigidities survives even in a cashless economy, interpreted here a ...
... addition money wages or prices were sticky in terms of the bread numéraire, the bakers’ guild would have a non-trivial monetary stabilisation policy role. The welfare significance of the numéraire when there are nominal wage or price rigidities survives even in a cashless economy, interpreted here a ...
Ch7
... Suppose that the CPI rises by 3 percent a year each year from now (2008) through 2028. Also suppose that the nominal interest rate on your loan is fixed at 5 percent a year. How much will a $100 repayment cost you in 2008 dollars, when you start to pay off your loan in 2018? How much will a $100 rep ...
... Suppose that the CPI rises by 3 percent a year each year from now (2008) through 2028. Also suppose that the nominal interest rate on your loan is fixed at 5 percent a year. How much will a $100 repayment cost you in 2008 dollars, when you start to pay off your loan in 2018? How much will a $100 rep ...
fiscal policy in an expectations driven liquidity trap
... rigidities and an interest rate rule. In a liquidity trap caused by a self-fulfilling state of low confidence, higher government spending has deflationary effects that reduce the spending multiplier when the zero lower bound is binding. Instead, cuts in marginal labor tax rates are inflationary and ...
... rigidities and an interest rate rule. In a liquidity trap caused by a self-fulfilling state of low confidence, higher government spending has deflationary effects that reduce the spending multiplier when the zero lower bound is binding. Instead, cuts in marginal labor tax rates are inflationary and ...
The Long-Run Aggregate Supply Curve Page 1 of 3
... their adjustment and the general price level in the economy has risen, say by 10 percent. Once all prices have risen by 10 percent, what would we expect businesses to do in response? Well, think about it. Businesses are out to make a profit and profit is the difference between revenue and cost. Good ...
... their adjustment and the general price level in the economy has risen, say by 10 percent. Once all prices have risen by 10 percent, what would we expect businesses to do in response? Well, think about it. Businesses are out to make a profit and profit is the difference between revenue and cost. Good ...
Factors that shift the Aggregate Demand Curve
... Real Wealth is the value of money in bank, bonds, stocks, and non-monetary assets people own measured in terms of what they will buy. ...
... Real Wealth is the value of money in bank, bonds, stocks, and non-monetary assets people own measured in terms of what they will buy. ...
Commentary: How Should Monetary Policy Be ∗ Michael Woodford
... but a more persistent one. Under this commitment, policy keeps the output gap negative for several quarters even after the supply shock no longer affects the economy, resulting in a period of inflation below its long-run target level. The advantage of this is that the supply shock is accompanied by ...
... but a more persistent one. Under this commitment, policy keeps the output gap negative for several quarters even after the supply shock no longer affects the economy, resulting in a period of inflation below its long-run target level. The advantage of this is that the supply shock is accompanied by ...
CHAP1.WP (Word5)
... they believe that with interest rates so close to zero that there is nothing left for them to do. With short-term Japanese interest rates at extremely low levels, there is speculation that the Japanese economy is experiencing a liquidity trap. Same is also true for the U.S. economy since 2008. Expla ...
... they believe that with interest rates so close to zero that there is nothing left for them to do. With short-term Japanese interest rates at extremely low levels, there is speculation that the Japanese economy is experiencing a liquidity trap. Same is also true for the U.S. economy since 2008. Expla ...
Woodford and Wicksell: a Cashless Economy or a Moneyless
... • The case of the pure cash system: This hypothetical kind of economy is characterized by the total absence of the lending of money or of credit which is “neither given nor received” (Wicksell, 1936 [1898], p.56). In short, transactions are exclusively paid by (gold) coins. In that case, the cash ho ...
... • The case of the pure cash system: This hypothetical kind of economy is characterized by the total absence of the lending of money or of credit which is “neither given nor received” (Wicksell, 1936 [1898], p.56). In short, transactions are exclusively paid by (gold) coins. In that case, the cash ho ...
does consumer price index represent the actual rate of inflation?
... Economists wake up in the morning hoping for a chance to debate the causes of inflation. There is no one cause that's universally agreed upon, but at least two theories are generally accepted: Demand-Pull Inflation - This theory can be summarized as "too much money chasing too few goods". In other w ...
... Economists wake up in the morning hoping for a chance to debate the causes of inflation. There is no one cause that's universally agreed upon, but at least two theories are generally accepted: Demand-Pull Inflation - This theory can be summarized as "too much money chasing too few goods". In other w ...
Money and generalized exchange: A critical look at Neo
... Credit and credit alone is money (…). A credit cancels a debt (…). By sale a credit is acquired, by purchase a debt is created. The object of commerce is the acquisition of credits (…). The issue of money is not an exclusive privilege of the government (…) money is one form or another is in fact, is ...
... Credit and credit alone is money (…). A credit cancels a debt (…). By sale a credit is acquired, by purchase a debt is created. The object of commerce is the acquisition of credits (…). The issue of money is not an exclusive privilege of the government (…) money is one form or another is in fact, is ...
mmi14-vanveen 19106661 en
... between domestic savings and investments. The consequent current account imbalances are no problem in this view as well-functioning financial markets will price foreign assets and liabilities efficiently and prevent the emergence of unsustainable foreign debt.3 Feldstein and Horioka (1980) empirica ...
... between domestic savings and investments. The consequent current account imbalances are no problem in this view as well-functioning financial markets will price foreign assets and liabilities efficiently and prevent the emergence of unsustainable foreign debt.3 Feldstein and Horioka (1980) empirica ...
test #1 production possibilities / growth / circular flow
... e) an increase in inflationary expectations 16) which of the following would cause the unemployment rate to increase? I. a woman who quits her job to spend more time with his children II. a man who has not looked for a job in two years but is now looking III. a woman who quits her job and begins lo ...
... e) an increase in inflationary expectations 16) which of the following would cause the unemployment rate to increase? I. a woman who quits her job to spend more time with his children II. a man who has not looked for a job in two years but is now looking III. a woman who quits her job and begins lo ...
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... captures the opportunity cost of holding money, which would lead to a negative α2. If a short rate would be included, it could be seen as a proxy for the “own” rate of return on holding money and the interest rate effect would be positive.7 Money supply can be under the control of the monetary autho ...
... captures the opportunity cost of holding money, which would lead to a negative α2. If a short rate would be included, it could be seen as a proxy for the “own” rate of return on holding money and the interest rate effect would be positive.7 Money supply can be under the control of the monetary autho ...
