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... 17. By increasing the growth rate of the money supply, the Federal Reserve can decrease the inflation rate. ANSWER: F 18. Most economists think that labor unions in the United States have contributed significantly to inflation. ANSWER: F 19. Fiscal policy cannot deal with inflation on a long-term ba ...
... 17. By increasing the growth rate of the money supply, the Federal Reserve can decrease the inflation rate. ANSWER: F 18. Most economists think that labor unions in the United States have contributed significantly to inflation. ANSWER: F 19. Fiscal policy cannot deal with inflation on a long-term ba ...
Macro Economics - e
... b) Fiscal policy : Fiscal policy is the policies of the government expenditure and its revenue. As Keynes believes that expenditure is the causing factor of inflation. When such expenditures are reduced, aggregate demand will be reduced and ultimately it helps to curb inflation in the economy. The o ...
... b) Fiscal policy : Fiscal policy is the policies of the government expenditure and its revenue. As Keynes believes that expenditure is the causing factor of inflation. When such expenditures are reduced, aggregate demand will be reduced and ultimately it helps to curb inflation in the economy. The o ...
Chapter 25 - uob.edu.bh
... the aggregate demand curve shifts to the left. You will see this on your graph because aggregate spending now equals only $250 billion, and the new aggregate demand curve shows that, when P = 0.5, Y = 500; when P = 1, Y = 250 and when P = 2, Y = 125. 3. The effect on the Keynesian aggregate demand c ...
... the aggregate demand curve shifts to the left. You will see this on your graph because aggregate spending now equals only $250 billion, and the new aggregate demand curve shows that, when P = 0.5, Y = 500; when P = 1, Y = 250 and when P = 2, Y = 125. 3. The effect on the Keynesian aggregate demand c ...
Chapter No. 11
... The Portfolio Demand for Money Money is just one of many financial instruments that we can hold in our investment portfolios. Expectations that interest rates will change in the future are related to the expected return on a bond and also affect the demand for money. When interest rates are expected ...
... The Portfolio Demand for Money Money is just one of many financial instruments that we can hold in our investment portfolios. Expectations that interest rates will change in the future are related to the expected return on a bond and also affect the demand for money. When interest rates are expected ...
Document
... 41. Because the focus of monetary and fiscal policy tends on the average to be on the short run, it has most often been which of the following? a. Expansionary b. Contractionary c. Steady, actually almost stagnant d. Up and down like a smooth wave ANSWER: a 42. Anti-inflationary fiscal policies incl ...
... 41. Because the focus of monetary and fiscal policy tends on the average to be on the short run, it has most often been which of the following? a. Expansionary b. Contractionary c. Steady, actually almost stagnant d. Up and down like a smooth wave ANSWER: a 42. Anti-inflationary fiscal policies incl ...
Meeting the Challenge of Asia
... of the crisis, bond markets have been exposed to significant disturbances that have made the measurement of inflation expectations and the associated risks more difficult than usual. Thus, it is useful to complement this measure with expectations extracted from inflation derivatives. In particular, ...
... of the crisis, bond markets have been exposed to significant disturbances that have made the measurement of inflation expectations and the associated risks more difficult than usual. Thus, it is useful to complement this measure with expectations extracted from inflation derivatives. In particular, ...
Principles of Macroeconomics, Exams, Fall 2011
... transactions contributes to US nominal GDP. If GDP does not change, just write down $0. For simplicity, assume that all goods are sold during the same period in which they are produced. a. A ...
... transactions contributes to US nominal GDP. If GDP does not change, just write down $0. For simplicity, assume that all goods are sold during the same period in which they are produced. a. A ...
Keynes-Wicksell and Neoclassical Models of Money and
... adjusting its selling price; the optimal policy is to adjust price only when excess demand or supply reaches certain barriers. He then shows that, by aggregating over firms, the average price may be expected to behave according to (1). Barro confines himself to cases where the aggregate price level ...
... adjusting its selling price; the optimal policy is to adjust price only when excess demand or supply reaches certain barriers. He then shows that, by aggregating over firms, the average price may be expected to behave according to (1). Barro confines himself to cases where the aggregate price level ...
Chapter 21. IS-LM Aggregate Output and Keynesian Cross Diagrams
... aggregate output are determined by that intersection. We can then shift the IS and LM curves around to see how they affect interest rates and output, i* and Y*. In the next chapter, we’ll see how policymakers manipulate those curves to increase output. But we still won’t be done because, as mentione ...
... aggregate output are determined by that intersection. We can then shift the IS and LM curves around to see how they affect interest rates and output, i* and Y*. In the next chapter, we’ll see how policymakers manipulate those curves to increase output. But we still won’t be done because, as mentione ...
the fall and rise of the gold standard
... new gold should have been allowed to flow to the bill market. It wasn’t. Banks intercepted it in order to construct a credit pyramid upon their greatly expanded gold reserves. The bank credit, however, was not healthy. It was not of the self-liquidating kind, as it would have if it had been based on ...
... new gold should have been allowed to flow to the bill market. It wasn’t. Banks intercepted it in order to construct a credit pyramid upon their greatly expanded gold reserves. The bank credit, however, was not healthy. It was not of the self-liquidating kind, as it would have if it had been based on ...
Study Questions concerning the Phillips Curve
... c. The misperception theory says that only unexpected inflation will lower unemployment because it fools businesses into thinking there’s an increase in demand for their product. ...
... c. The misperception theory says that only unexpected inflation will lower unemployment because it fools businesses into thinking there’s an increase in demand for their product. ...
Chapter_16
... Assume that you have deposited $1,000 dollars in your checking account. The bank doesn’t keep all of your money, but rather lends out some of it to businesses and other people. The portion of your original $1,000 that the bank needs to keep on hand, or not loan out, is called the required reserve ra ...
... Assume that you have deposited $1,000 dollars in your checking account. The bank doesn’t keep all of your money, but rather lends out some of it to businesses and other people. The portion of your original $1,000 that the bank needs to keep on hand, or not loan out, is called the required reserve ra ...
Inflation
... The Income effects of inflation refers to the rate at which individual income rises during inflation. Ideally during times of inflation, your income rises at a rate that at least matches the inflation rate. Individuals on fixed incomes (Social Security, pensions, and Unemployment for example) are af ...
... The Income effects of inflation refers to the rate at which individual income rises during inflation. Ideally during times of inflation, your income rises at a rate that at least matches the inflation rate. Individuals on fixed incomes (Social Security, pensions, and Unemployment for example) are af ...
Macroeconomics - WordPress.com
... When firms are making their price/output decisions, their expectations of future prices may affect their current decisions. If a firm expects that its competitors will raise their prices, it may raise its own price. The firm’s profit-maximizing optimum price is presumably not too far from the averag ...
... When firms are making their price/output decisions, their expectations of future prices may affect their current decisions. If a firm expects that its competitors will raise their prices, it may raise its own price. The firm’s profit-maximizing optimum price is presumably not too far from the averag ...
The Tools of Monetary Policy
... the cost of borrowed funds for depository institutions that borrow reserves Decreasing the discount rate decreases the cost of borrowed funds for depository institutions that borrow reserves ...
... the cost of borrowed funds for depository institutions that borrow reserves Decreasing the discount rate decreases the cost of borrowed funds for depository institutions that borrow reserves ...
Determinants of Inflation: A Case Study of Iran
... (1876-1947) proposed his famous equation of exchange M×V=P×T indicating that the whole money in circulation would be used in transactions with value as P×T. This and other equations like Cambridge cash balance equation belong to the time when the use of mathematics in neo-economic analysis was growi ...
... (1876-1947) proposed his famous equation of exchange M×V=P×T indicating that the whole money in circulation would be used in transactions with value as P×T. This and other equations like Cambridge cash balance equation belong to the time when the use of mathematics in neo-economic analysis was growi ...
Figure 1 Aggregate Supply and Demand
... rates, a “Phillips curve.” In this module the inflation rate you get does depend on the unemployment rate (or equivalently, on the level of real GDP) but it also depends on the past history of inflation in the economy. As a result, a particular unemployment rate may appear in a given year with virtu ...
... rates, a “Phillips curve.” In this module the inflation rate you get does depend on the unemployment rate (or equivalently, on the level of real GDP) but it also depends on the past history of inflation in the economy. As a result, a particular unemployment rate may appear in a given year with virtu ...
Debt, Deleveraging, and the Liquidity Trap: A Fisher‐Minsky‐Koo approach
... The current preoccupation with debt harks back to a long tradition in economic analysis. Irving Fisher (1933) famously argued that the Great Depression was caused by a vicious circle in which falling prices increased the real burden of debt, which led in turn to further deflation. The late Hyman Min ...
... The current preoccupation with debt harks back to a long tradition in economic analysis. Irving Fisher (1933) famously argued that the Great Depression was caused by a vicious circle in which falling prices increased the real burden of debt, which led in turn to further deflation. The late Hyman Min ...
The Aggregate Demand Curve
... increases aggregate spending (on domestic goods) shifts AD to the right. Any non-price-level change that decreases aggregate spending (on domestic goods) shifts AD to the left. ...
... increases aggregate spending (on domestic goods) shifts AD to the right. Any non-price-level change that decreases aggregate spending (on domestic goods) shifts AD to the left. ...
Lecture Two – Edited for use
... the difference between those who would like employment at the current wage rate and those willing and able to take a job. ...
... the difference between those who would like employment at the current wage rate and those willing and able to take a job. ...
Chapter 24: Aggregate Demand and Aggregate Supply
... - An increase in AS is shown by a shift to the right and a decrease is shown upward shift to the left. - A reduction in production costs will cause AS to shift right and an increase in costs will cause it to shift upward to the left. Equilibrium Real Output and the Price Level - The equilibrium leve ...
... - An increase in AS is shown by a shift to the right and a decrease is shown upward shift to the left. - A reduction in production costs will cause AS to shift right and an increase in costs will cause it to shift upward to the left. Equilibrium Real Output and the Price Level - The equilibrium leve ...