ECON 102 Tutorial: Week 20
... Draw a diagram which illustrates money market equilibrium when the economy is in a liquidity trap situation. First, let’s define what is a liquidity trap: An economy is in a liquidity trap if money demand is perfectly elastic with respect to interest rate changes, i.e. the money demand curve is hori ...
... Draw a diagram which illustrates money market equilibrium when the economy is in a liquidity trap situation. First, let’s define what is a liquidity trap: An economy is in a liquidity trap if money demand is perfectly elastic with respect to interest rate changes, i.e. the money demand curve is hori ...
An estimation of the J-Curve effect between South Africa and the
... depreciation of the domestic currency. At a macro level, a currency crisis could result in the instability of domestic price levels and could also lower the economic growth of a country (Knedlik, 2006). ...
... depreciation of the domestic currency. At a macro level, a currency crisis could result in the instability of domestic price levels and could also lower the economic growth of a country (Knedlik, 2006). ...
Chapter 19
... deterioration of the trade balance. 2. An increase in foreign demand leads to an increase in domestic output and an improvement in the trade balance. • Implications 1. Shocks to demand in one country affect all other countries. 2. The interactions between countries complicate the task of policymaker ...
... deterioration of the trade balance. 2. An increase in foreign demand leads to an increase in domestic output and an improvement in the trade balance. • Implications 1. Shocks to demand in one country affect all other countries. 2. The interactions between countries complicate the task of policymaker ...
oecd development centre
... lower debt costs may be of utmost importance in boosting investment and future output growth on the continent. This paper aims at identifying the determinants of South African currency premia — such premia usually form an important element of debt cost in developing countries — in order to assess th ...
... lower debt costs may be of utmost importance in boosting investment and future output growth on the continent. This paper aims at identifying the determinants of South African currency premia — such premia usually form an important element of debt cost in developing countries — in order to assess th ...
The Fluctuating Canadian Dollar
... witnesses’ view, the decrease in the Canadian dollar’s exchange rate since mid-2014 can be almost entirely explained by falling oil prices. The committee was told that, for households, a lower exchange rate for Canada’s dollar means higher prices for imported consumer goods and reduced “purchasing p ...
... witnesses’ view, the decrease in the Canadian dollar’s exchange rate since mid-2014 can be almost entirely explained by falling oil prices. The committee was told that, for households, a lower exchange rate for Canada’s dollar means higher prices for imported consumer goods and reduced “purchasing p ...
Fixed Exchange Rates and the Trilemma
... Long-Run Adjustment (continued): In panel (d), in the FX market, the domestic return DR, which equals the home interest rate, gradually shifts back to its original level. The foreign return curve FR does not move at all: there are no further changes in the Foreign interest rate or in the future expe ...
... Long-Run Adjustment (continued): In panel (d), in the FX market, the domestic return DR, which equals the home interest rate, gradually shifts back to its original level. The foreign return curve FR does not move at all: there are no further changes in the Foreign interest rate or in the future expe ...
No: 2006-39 July 31, 2006 SUMMARY OF MONETARY POLICY COMMITTEE DISCUSSIONS
... when seasonally adjusted. It is estimated that this rate will continue to increase in July also. 4. Effects of the recent movements of exchange rates on inflation can be handled in two categories as primary and secondary effects. Primary effects cover mostly price adjustments in prices of goods with ...
... when seasonally adjusted. It is estimated that this rate will continue to increase in July also. 4. Effects of the recent movements of exchange rates on inflation can be handled in two categories as primary and secondary effects. Primary effects cover mostly price adjustments in prices of goods with ...
a stable money demand function for zimbabwe as a pre
... The analysis of monetary aggregates is one of the pillars of Zimbabwe’s monetary policy strategy since money growth is highly correlated with inflation. Consequently monetary authorities use money growth as one indicator for future risks to price stability. A stable money demand function is therefor ...
... The analysis of monetary aggregates is one of the pillars of Zimbabwe’s monetary policy strategy since money growth is highly correlated with inflation. Consequently monetary authorities use money growth as one indicator for future risks to price stability. A stable money demand function is therefor ...
Not So Disconnected: Exchange Rates and the Capital Stock
... from the rest of the world. However, a low output of nontraded goods in a large country simultaneously triggers a rise in the world market price of traded goods, while a low output of nontraded goods in a small country does not. As a consequence, the currencies of more systemic countries tend to app ...
... from the rest of the world. However, a low output of nontraded goods in a large country simultaneously triggers a rise in the world market price of traded goods, while a low output of nontraded goods in a small country does not. As a consequence, the currencies of more systemic countries tend to app ...
Research and Monetary Policy Department Working Paper No:07/07
... In various studies the implications of the balance sheet e¤ects on the dynamics of the transmission of shocks and optimal monetary and exchange rate policies have been analyzed by integrating the above-mentioned endogenous risk premium mechanism into general equilibrium models. In a simple static mo ...
... In various studies the implications of the balance sheet e¤ects on the dynamics of the transmission of shocks and optimal monetary and exchange rate policies have been analyzed by integrating the above-mentioned endogenous risk premium mechanism into general equilibrium models. In a simple static mo ...
Economics for Today 2005
... • Which goods and services are included in the CPI? • How is the CPI computed? • What is a base year? • How is the inflation rate computed? • What is disinflation? ...
... • Which goods and services are included in the CPI? • How is the CPI computed? • What is a base year? • How is the inflation rate computed? • What is disinflation? ...
ii pu economics paper
... 11. Write any two distinguish between deductive and inductive method of economics. 12. What is Indifference curve? Two indifference curves cannot interest each other. Why? 13. Consider the demand for onion at Rs. 20 per kg, demand for onion is 30kgs. If price increases to Rs.25 per kg. Demand decrea ...
... 11. Write any two distinguish between deductive and inductive method of economics. 12. What is Indifference curve? Two indifference curves cannot interest each other. Why? 13. Consider the demand for onion at Rs. 20 per kg, demand for onion is 30kgs. If price increases to Rs.25 per kg. Demand decrea ...
This PDF is a selection from an out-of-print volume from... of Economic Research Volume Title: Exchange Rate Theory and Practice
... the long-term real interest rate and the impulse’s coming from real government expenditures and foreign trade determine actual output. The interest rate effect on output is expected to take place with a substantial lag because investment reacts slowly. It takes time to decide on and plan capital pro ...
... the long-term real interest rate and the impulse’s coming from real government expenditures and foreign trade determine actual output. The interest rate effect on output is expected to take place with a substantial lag because investment reacts slowly. It takes time to decide on and plan capital pro ...
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... optimal domestic policy does not react to policy shocks and cyclical conditions in the world economy. This may be the case, for instance, when goods are produced with domestic inputs only and are priced in the producers’ currency, or when exporters are fully insured against currency volatility. Othe ...
... optimal domestic policy does not react to policy shocks and cyclical conditions in the world economy. This may be the case, for instance, when goods are produced with domestic inputs only and are priced in the producers’ currency, or when exporters are fully insured against currency volatility. Othe ...
The Effects of Budget Deficit Reduction on the Exchange Rate
... Since policymakers want to know whether deficit reduction will cause their currency to rise or fall, it is necessary to know the relative size of these different effects. In other words, when do the indirect effects, which increase the exchange rate, dominate the direct effect, which decreases the e ...
... Since policymakers want to know whether deficit reduction will cause their currency to rise or fall, it is necessary to know the relative size of these different effects. In other words, when do the indirect effects, which increase the exchange rate, dominate the direct effect, which decreases the e ...
NBER WORKING PAPER SERIES PRICING TO MARKET
... illustrated as in Figure 4, which follows Dornbusch. Clearly a dollar appreciation, while it lowers the dollar price, raises the ecu price. Thus the dollar price does not fall in full proportion to the appreciation. Obviously this depends on the US being a large country: specifically, the elasticity ...
... illustrated as in Figure 4, which follows Dornbusch. Clearly a dollar appreciation, while it lowers the dollar price, raises the ecu price. Thus the dollar price does not fall in full proportion to the appreciation. Obviously this depends on the US being a large country: specifically, the elasticity ...
with Foreign Business Cycles
... Before we move to a formal empirical experiment to investigate how the Australian business cycle is related with the U.S. and the Japanese business cycles, let us first consider some graphical representations of the business cycles of these countries. Figure 2 shows the plots of the log of real gros ...
... Before we move to a formal empirical experiment to investigate how the Australian business cycle is related with the U.S. and the Japanese business cycles, let us first consider some graphical representations of the business cycles of these countries. Figure 2 shows the plots of the log of real gros ...
Forecasting Global Commodity Prices Using South
... tied to the fact that these smaller economies typically experience significant turmoil due to exogenous shocks and policy change. These are still concerns for this research question, however, the countries in this sample have been more stable in the past decade than during the time period of Cashin ...
... tied to the fact that these smaller economies typically experience significant turmoil due to exogenous shocks and policy change. These are still concerns for this research question, however, the countries in this sample have been more stable in the past decade than during the time period of Cashin ...
Short Macro Review
... The government should avoid being the cause of economic fluctuations. The government should respond to changes in the private economy in order to stabilize aggregate demand, e.g., the Bush tax rebate and Obama’s stimulus package Obama insisted that only government could “break the vicious cycle ...
... The government should avoid being the cause of economic fluctuations. The government should respond to changes in the private economy in order to stabilize aggregate demand, e.g., the Bush tax rebate and Obama’s stimulus package Obama insisted that only government could “break the vicious cycle ...
CE91 - MexDer
... Bills reported on day t for the contract’s effective term plus 91 days derived from the Cetes Discount curve provided by the price vendor hired by MexDer. = Rate of yield reported on day t for the ...
... Bills reported on day t for the contract’s effective term plus 91 days derived from the Cetes Discount curve provided by the price vendor hired by MexDer. = Rate of yield reported on day t for the ...
NBER WORKING PAPER SERIES THE ROLE OF FINANCIAL STRUCTURE
... aggregate demand causes the relative price of nontradables to fall. In turn, firms face lower prices but unchanged costs. The reason why costs are unchanged is that nominal wages are downwardly rigid and the exchange rate is pegged, so that real wages expressed in terms of tradables are unable to fa ...
... aggregate demand causes the relative price of nontradables to fall. In turn, firms face lower prices but unchanged costs. The reason why costs are unchanged is that nominal wages are downwardly rigid and the exchange rate is pegged, so that real wages expressed in terms of tradables are unable to fa ...
International Monetary Systems
... grew, their need for official international reserves to maintain fixed exchange rates grew as well. • But this rate of growth was faster than the growth rate of the gold reserves that central banks held. – Supply of gold from new discoveries was growing slowly. – Holding dollar-denominated assets wa ...
... grew, their need for official international reserves to maintain fixed exchange rates grew as well. • But this rate of growth was faster than the growth rate of the gold reserves that central banks held. – Supply of gold from new discoveries was growing slowly. – Holding dollar-denominated assets wa ...
Exchange rate
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In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, FX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency. For example, an interbank exchange rate of 119 Japanese yen (JPY, ¥) to the United States dollar (US$) means that ¥119 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥119. In this case it is said that the price of a dollar in terms of yen is ¥119, or equivalently that the price of a yen in terms of dollars is $1/119.Exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers where currency trading is continuous: 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday. The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.In the retail currency exchange market, a different buying rate and selling rate will be quoted by money dealers. Most trades are to or from the local currency. The buying rate is the rate at which money dealers will buy foreign currency, and the selling rate is the rate at which they will sell the currency. The quoted rates will incorporate an allowance for a dealer's margin (or profit) in trading, or else the margin may be recovered in the form of a commission or in some other way. Different rates may also be quoted for cash (usually notes only), a documentary form (such as traveler's cheques) or electronically (such as a credit card purchase). The higher rate on documentary transactions has been justified to compensate for the additional time and cost of clearing the document, while the cash is available for resale immediately. Some dealers on the other hand prefer documentary transactions because of the security concerns with cash.