What is the difference between a recession and a depression?
... monetary policy13; while a depression entails a significant and protracted asset price cycle; it involves a contraction in credit or debt (thus potentially rendering monetary policy impotent); and it is characterized by a decline in the general price level as well as in economic activity. Thus, the ...
... monetary policy13; while a depression entails a significant and protracted asset price cycle; it involves a contraction in credit or debt (thus potentially rendering monetary policy impotent); and it is characterized by a decline in the general price level as well as in economic activity. Thus, the ...
MULTIPLE CHOICE. Choose the one alternative
... 13) When the inflation rate is expected to increase, the real cost of borrowing declines at any given interest rate; the supply of bonds _____ and the supply curve shifts to the _____. A) decreases; right ...
... 13) When the inflation rate is expected to increase, the real cost of borrowing declines at any given interest rate; the supply of bonds _____ and the supply curve shifts to the _____. A) decreases; right ...
The Great Depression of the 1930s
... it’s a severe credit crunch that affects real economy through supply of loans • Bernanke’s regression demonstrates that adding bank failures helps account for the output decline that money supply per se does not seem to explain • It’s a black box that needs evidence on bank behaviour to be more pers ...
... it’s a severe credit crunch that affects real economy through supply of loans • Bernanke’s regression demonstrates that adding bank failures helps account for the output decline that money supply per se does not seem to explain • It’s a black box that needs evidence on bank behaviour to be more pers ...
Quiz: Introductory Macroeconomics
... a. an increase in interest rates and real GDP. b. a decrease in interest rates and real GDP. c. a decrease in interest rates but the effect on real GDP is indeterminant. d. an increase in interest rates but the effect on real GDP is indeterminant. ...
... a. an increase in interest rates and real GDP. b. a decrease in interest rates and real GDP. c. a decrease in interest rates but the effect on real GDP is indeterminant. d. an increase in interest rates but the effect on real GDP is indeterminant. ...
ECON 102 Tutorial: Week 19
... Suppose the equation of the demand for money curve is MD = 20,000 8,000i. In part (a) we found the equilibrium rate of interest is 5% if money supply is 19,600. By how much would the central bank have to change the money supply if it wished to increased the equilibrium rate of interest by 1 per ce ...
... Suppose the equation of the demand for money curve is MD = 20,000 8,000i. In part (a) we found the equilibrium rate of interest is 5% if money supply is 19,600. By how much would the central bank have to change the money supply if it wished to increased the equilibrium rate of interest by 1 per ce ...
Fractional Reserve Banking
... b. how fast should the money supply be allowed to grow? Growth of The Money Supply a. Monetarists believe in slow but steady growth b. Allow the money supply to grow at a rate that is equal to the anticipated rate of GDP increase plus the rate of productivity (how much more can be produced this year ...
... b. how fast should the money supply be allowed to grow? Growth of The Money Supply a. Monetarists believe in slow but steady growth b. Allow the money supply to grow at a rate that is equal to the anticipated rate of GDP increase plus the rate of productivity (how much more can be produced this year ...
homework 3 (chapter 34) eco 11 fall 2006 udayan roy
... interest rate adjusts to balance the supply and demand for loanable funds; and the price level adjusts to balance the supply and demand for money. According to liquidity preference theory, an increase in the price level causes the interest rate to a. increase, which makes output demanded (of “Made i ...
... interest rate adjusts to balance the supply and demand for loanable funds; and the price level adjusts to balance the supply and demand for money. According to liquidity preference theory, an increase in the price level causes the interest rate to a. increase, which makes output demanded (of “Made i ...
The Great Economic Depression and the Fiscal Policy
... that nominal interest rates were close to zero during the depression, concluding that too expansionary monetary policy caused no good benefits for the economy. During the first decade after the depression, many economists will incline towards explanation of the real side of the economy than monetary ...
... that nominal interest rates were close to zero during the depression, concluding that too expansionary monetary policy caused no good benefits for the economy. During the first decade after the depression, many economists will incline towards explanation of the real side of the economy than monetary ...
Investment Basics: Inflation – Its Causes and Impacts
... services, causing detriments to the economy. It also negatively impacts business profits, as organizations often incur costs to continually communicate their price changes. An extreme example of this occurred during the hyperinflationary period of the 1920’s in Germany when it was common for waitres ...
... services, causing detriments to the economy. It also negatively impacts business profits, as organizations often incur costs to continually communicate their price changes. An extreme example of this occurred during the hyperinflationary period of the 1920’s in Germany when it was common for waitres ...
Investment Basics: Inflation – Its Causes and Impacts
... services, causing detriments to the economy. It also negatively impacts business profits, as organizations often incur costs to continually communicate their price changes. An extreme example of this occurred during the hyperinflationary period of the 1920’s in Germany when it was common for waitres ...
... services, causing detriments to the economy. It also negatively impacts business profits, as organizations often incur costs to continually communicate their price changes. An extreme example of this occurred during the hyperinflationary period of the 1920’s in Germany when it was common for waitres ...
Money Growth and Inflation
... •Therefore, with rising prices, it is more difficult to compare real revenues, costs, and profits over time. 6. A Special Cost of Unexpected Inflation: Arbitrary Redistribution of Wealth •Unexpected inflation redistributes wealth among the population in a way that has nothing to do with either merit ...
... •Therefore, with rising prices, it is more difficult to compare real revenues, costs, and profits over time. 6. A Special Cost of Unexpected Inflation: Arbitrary Redistribution of Wealth •Unexpected inflation redistributes wealth among the population in a way that has nothing to do with either merit ...
Fiscal Policy
... is going to be a recession, they will increase AD, however if this forecast was wrong and the economy grew too fast, the govt. action would cause inflation. 4. Time Lags. If the govt. plans to increase spending this can take a long time to filter into the economy and it may be too late. Spending pla ...
... is going to be a recession, they will increase AD, however if this forecast was wrong and the economy grew too fast, the govt. action would cause inflation. 4. Time Lags. If the govt. plans to increase spending this can take a long time to filter into the economy and it may be too late. Spending pla ...
Economics 101
... but the public deposits only $8 million of the money received into commercial banking checking accounts (and keeps the other $2 million as cash), then the maximum resulting increase in the money supply from this open market operation will be A. B. C. D. E. ...
... but the public deposits only $8 million of the money received into commercial banking checking accounts (and keeps the other $2 million as cash), then the maximum resulting increase in the money supply from this open market operation will be A. B. C. D. E. ...
Marginal cost - is the change in total cost that arises
... demand, excess capacity and a shrinking money supply, as in the great depression of the early 1930s. The expectation that prices will be lower tomorrow may encourage consumers to delay purchases, depressing demand and forcing firms to cut prices by even more. Falling prices also inflate the real bur ...
... demand, excess capacity and a shrinking money supply, as in the great depression of the early 1930s. The expectation that prices will be lower tomorrow may encourage consumers to delay purchases, depressing demand and forcing firms to cut prices by even more. Falling prices also inflate the real bur ...
Lecture 8b Monetarism and the quantity theory of money
... Recent evidence suggests that velocity has been unstable and unpredictable since the 1980s. ...
... Recent evidence suggests that velocity has been unstable and unpredictable since the 1980s. ...
AP Macroeconomics - Valley View High School
... Complete and turn in all assignments on time. Late work will be not be accepted. Extra credit is rarely available in AP Macroeconomics. All make-up work from excused absences must be turned in pursuant to Valley View ISD guidelines. If you are absent it is your responsibility to see me before or aft ...
... Complete and turn in all assignments on time. Late work will be not be accepted. Extra credit is rarely available in AP Macroeconomics. All make-up work from excused absences must be turned in pursuant to Valley View ISD guidelines. If you are absent it is your responsibility to see me before or aft ...
Final - Wofford
... credible. Explain the importance of an inflation reduction policy that is announced ahead of time and is credible. In a country where expected inflation has been and continues to be high, a reduction in the money supply will decrease inflation some, but it will also increase unemployment and decreas ...
... credible. Explain the importance of an inflation reduction policy that is announced ahead of time and is credible. In a country where expected inflation has been and continues to be high, a reduction in the money supply will decrease inflation some, but it will also increase unemployment and decreas ...
