AP Economics Test: Scarcity, Opportunity Cost, and
... b. It means resources are plentiful and opportunities to produce greater amounts of goods and sevices are unlimited c. It suggests that the use of resources to produce a set of goods and services means that as more of one is produced, some of the other must be sacrificed. d. It suggests that unlimit ...
... b. It means resources are plentiful and opportunities to produce greater amounts of goods and sevices are unlimited c. It suggests that the use of resources to produce a set of goods and services means that as more of one is produced, some of the other must be sacrificed. d. It suggests that unlimit ...
Measuring Unemployment
... The workings of supply and demand mean that the prices of some goods increase while some decrease, e.g., the relative prices of goods and services change ...
... The workings of supply and demand mean that the prices of some goods increase while some decrease, e.g., the relative prices of goods and services change ...
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... the nominal interest rate has to fall to induce people to willingly hold these extra money balances. Thus, the LM curve will shift to the right. A drop in the nominal interest rate will spur investment spending (a downward movement along the IS curve) and equilibrium GDP demand will be higher. In ot ...
... the nominal interest rate has to fall to induce people to willingly hold these extra money balances. Thus, the LM curve will shift to the right. A drop in the nominal interest rate will spur investment spending (a downward movement along the IS curve) and equilibrium GDP demand will be higher. In ot ...
Chapter 1: Introduction
... feature of the full-employment flexible-price model of the economy. Economists call this the classical dichotomy: real variables (like real GDP, real investment spending, or the real exchange rate) can be analyzed and calculated without thinking of nominal variables like the price level. You will al ...
... feature of the full-employment flexible-price model of the economy. Economists call this the classical dichotomy: real variables (like real GDP, real investment spending, or the real exchange rate) can be analyzed and calculated without thinking of nominal variables like the price level. You will al ...
Monetary Policy
... 3. Consider This … Pushing on a String Japan’s ineffective expansionary monetary policy illustrates the potential inability of monetary policy to bring an economy out of recession. While pulling on a string (restrictive monetary policy) is likely to move the attached object to its desired destinatio ...
... 3. Consider This … Pushing on a String Japan’s ineffective expansionary monetary policy illustrates the potential inability of monetary policy to bring an economy out of recession. While pulling on a string (restrictive monetary policy) is likely to move the attached object to its desired destinatio ...
Document
... payment will be $4,500 (90% of $5,000), but as a result, I will earn an additional $10,000, so I will be ahead of the game by $5,500. Since Larry’s loan-sharking business can make some people better off, as in this example, loan sharking may have social benefits. (One argument against legalizing loa ...
... payment will be $4,500 (90% of $5,000), but as a result, I will earn an additional $10,000, so I will be ahead of the game by $5,500. Since Larry’s loan-sharking business can make some people better off, as in this example, loan sharking may have social benefits. (One argument against legalizing loa ...
Inflation, Recession, and Stagflation
... rigid, in both absolute and relative terns, throughout the analysis. Changes in the structure of relative prices are ignored - indeed, the analysis often explicitly assumes that prices remain always "at their historic levels".So too the structure of output is considered to be ...
... rigid, in both absolute and relative terns, throughout the analysis. Changes in the structure of relative prices are ignored - indeed, the analysis often explicitly assumes that prices remain always "at their historic levels".So too the structure of output is considered to be ...
Exam 3 with Answer Key attached
... a. do nothing because the economy must go into a recession to create a deflationary gap to reduce other costs of production b. do nothing because the price level seldom changes when the price of oil increases c. sell bonds in the open market d. encourage firms to not adjust the wages they pay e. buy ...
... a. do nothing because the economy must go into a recession to create a deflationary gap to reduce other costs of production b. do nothing because the price level seldom changes when the price of oil increases c. sell bonds in the open market d. encourage firms to not adjust the wages they pay e. buy ...
Inflation, Unemployment, and Hayek
... all sorts emerged in the 1970s. Third, there has been a sharp decline in real wages. Fourth, although monetary expansion and inflation continued through much of the 1970s, a firm enough hand was kept on the monetary controls that money supply growth dropped sharply in 1974. Fifth, unemployment has r ...
... all sorts emerged in the 1970s. Third, there has been a sharp decline in real wages. Fourth, although monetary expansion and inflation continued through much of the 1970s, a firm enough hand was kept on the monetary controls that money supply growth dropped sharply in 1974. Fifth, unemployment has r ...
AP Macro Economics - Spring Branch ISD
... curves and AD2 and AS2 show the new aggregate demand and supply curves. At the original equilibrium price and quantity, this economy is in the ______________________________ range of the AS curve. 23. Suppose the price level increases, but real output is unchanged. We can infer that ...
... curves and AD2 and AS2 show the new aggregate demand and supply curves. At the original equilibrium price and quantity, this economy is in the ______________________________ range of the AS curve. 23. Suppose the price level increases, but real output is unchanged. We can infer that ...
Escaping from a Liquidity Trap and Deflation: The Foolproof Way
... If the nominal interest rate is initially low, which it is when inflation and expected future inflation are low, the central bank does not have much room to lower the interest rate further. But with deflation and expectations of deflation, even a nominal interest rate of zero percent can result in a ...
... If the nominal interest rate is initially low, which it is when inflation and expected future inflation are low, the central bank does not have much room to lower the interest rate further. But with deflation and expectations of deflation, even a nominal interest rate of zero percent can result in a ...
Working Paper No. 59 James R. Lothian Anthony Cassese 1050
... assumptions of the polar cases. For the most part, though, the empirical application of such models has been limited. Much of the empirical work is subject to the objection that the emphasis is upon one, or at most a few, of a considerably larger number of potential avenues for the international tra ...
... assumptions of the polar cases. For the most part, though, the empirical application of such models has been limited. Much of the empirical work is subject to the objection that the emphasis is upon one, or at most a few, of a considerably larger number of potential avenues for the international tra ...
Liquidity Traps and Expectation Dynamics: Fiscal Stimulus or Fiscal
... under perfect foresight the economy will necessarily be at the steady state. They argue that in some cases a commitment to sucient monetary expansion at low inflation can also be eective. Similarly, Evans and Honkapohja (2005) argue that in a flexible price economy a switch to a money growth r ...
... under perfect foresight the economy will necessarily be at the steady state. They argue that in some cases a commitment to sucient monetary expansion at low inflation can also be eective. Similarly, Evans and Honkapohja (2005) argue that in a flexible price economy a switch to a money growth r ...
the optimal path of monetary expansion
... provides the “maximum” amount of transactions services at a certain level of income. Keep the level of prices stable. It is the real and not the nominal unit of money that produces transactions services. ...
... provides the “maximum” amount of transactions services at a certain level of income. Keep the level of prices stable. It is the real and not the nominal unit of money that produces transactions services. ...
Chapter 12 LECTURE NOTES
... 1. To do this, the Fed changes the nation’s money supply. 2. To change money supply, the Fed manipulates size of excess reserves held by banks. C. Monetary policy has a very powerful impact on the economy, and the Chairman of the Fed’s Board of Governors, Alan Greenspan currently, is sometimes calle ...
... 1. To do this, the Fed changes the nation’s money supply. 2. To change money supply, the Fed manipulates size of excess reserves held by banks. C. Monetary policy has a very powerful impact on the economy, and the Chairman of the Fed’s Board of Governors, Alan Greenspan currently, is sometimes calle ...
War, Money, and Inflation in the United States from the Revolution to
... The modern view of optimal war finance owes a great deal to Robert Barro (1987, 1989). Barro argued that if the war government relied entirely on taxes there the sharp spike in taxes that would result would discourage economic activity. By borrowing, the war government smoothes taxes over time, mini ...
... The modern view of optimal war finance owes a great deal to Robert Barro (1987, 1989). Barro argued that if the war government relied entirely on taxes there the sharp spike in taxes that would result would discourage economic activity. By borrowing, the war government smoothes taxes over time, mini ...
Unit 5 Test …may the force be with you…….
... the interest rate to fall. As the interest rate falls, the quantity of money demanded increases, which tends to diminish the excess supply of money. PTS: 1 DIF: 3 REF: 34-1 TOP: Money market MSC: Analytical 5. Use the money market to explain the interest-rate effect and its relation to the slope of ...
... the interest rate to fall. As the interest rate falls, the quantity of money demanded increases, which tends to diminish the excess supply of money. PTS: 1 DIF: 3 REF: 34-1 TOP: Money market MSC: Analytical 5. Use the money market to explain the interest-rate effect and its relation to the slope of ...
Chapter 26
... a. Incorrect. The belief that the velocity of money is not constant but highly predictable is associated with the monetarist school. b. Incorrect. The belief that the velocity of money is not constant but highly predictable is associated with the monetarist school. c. Incorrect. The belief that the ...
... a. Incorrect. The belief that the velocity of money is not constant but highly predictable is associated with the monetarist school. b. Incorrect. The belief that the velocity of money is not constant but highly predictable is associated with the monetarist school. c. Incorrect. The belief that the ...
Sample Final Examination
... A. the supply of money will decrease. B. the supply of money will increase. C. people will hold less of their wealth in the form of money (i.e., the demand for money will decrease). D. people will hold more of their wealth in the form of money. (i.e., the demand for money will increase). E. interest ...
... A. the supply of money will decrease. B. the supply of money will increase. C. people will hold less of their wealth in the form of money (i.e., the demand for money will decrease). D. people will hold more of their wealth in the form of money. (i.e., the demand for money will increase). E. interest ...
Monetary Policy
... Expectation errors can be harmful. Central bank inflation policies are generally not secret. However, errors can still be made. Random errors rather than statistically biased errors. ...
... Expectation errors can be harmful. Central bank inflation policies are generally not secret. However, errors can still be made. Random errors rather than statistically biased errors. ...
