16 - 嘉義大學
... addition to income taxes. 43. An income tax cut increases real GDP by more when it (a) increases aggregate supply. (b) decreases aggregate supply. (c) has no effect on aggregate demand. (d) has no effect on aggregate supply. 44. Suppose that banks hold no excess reserves and that people keep no curr ...
... addition to income taxes. 43. An income tax cut increases real GDP by more when it (a) increases aggregate supply. (b) decreases aggregate supply. (c) has no effect on aggregate demand. (d) has no effect on aggregate supply. 44. Suppose that banks hold no excess reserves and that people keep no curr ...
Rethinking the Role of NCBs in the EMU
... trade generates an excess supply of domestic goods, which is denoted by -Xe. In addition, the rise in the price level reduces the real value of nominal wealth, whose value is held fixed at one. This too creates an excess supply in the domestic goods market, and in the amount -Xw. These two effects r ...
... trade generates an excess supply of domestic goods, which is denoted by -Xe. In addition, the rise in the price level reduces the real value of nominal wealth, whose value is held fixed at one. This too creates an excess supply in the domestic goods market, and in the amount -Xw. These two effects r ...
Exchange Rates as Exchange Rate Common Factors"
... has become standard procedure for exchange-rate model validation, work in this area has discovered (at least) three things. First, the particular time-period of the sample matters. Fundamentalsbased models exhibited good ability to forecast exchange rates during the 1980s and early 1990s (Mark, 1995 ...
... has become standard procedure for exchange-rate model validation, work in this area has discovered (at least) three things. First, the particular time-period of the sample matters. Fundamentalsbased models exhibited good ability to forecast exchange rates during the 1980s and early 1990s (Mark, 1995 ...
A SINGLE CURRENCY FOR THE PACIFIC ISLAND COUNTRIES: A STEPWISE APPROACH
... an independent monetary policy for each island country, responsibilities for which have been now shifted to the central banks of the concerned metropolitan countries. The policy behind such savings embody a ‘piggy back’ or ‘free rider’ effect of using an established foreign currency as one’s own; an ...
... an independent monetary policy for each island country, responsibilities for which have been now shifted to the central banks of the concerned metropolitan countries. The policy behind such savings embody a ‘piggy back’ or ‘free rider’ effect of using an established foreign currency as one’s own; an ...
Slide 1
... • Intuition of Okun’s law: The labour market is growing (in numbers and productivity) every year. Output must grow at least this fast, or the economy will not absorb all of the labour. • If inflationary expectations are merely last year’s inflation rate, then the Phillips Curve becomes: πt - πt-1 = ...
... • Intuition of Okun’s law: The labour market is growing (in numbers and productivity) every year. Output must grow at least this fast, or the economy will not absorb all of the labour. • If inflationary expectations are merely last year’s inflation rate, then the Phillips Curve becomes: πt - πt-1 = ...
Transaction exposure
... • A forward hedge involves a forward (or futures) contract and a source of funds to fulfill the contract. • In some situations, funds to fulfill the forward exchange contract are not already available or due to be received later, but must be purchased in the spot market at some future date. • This t ...
... • A forward hedge involves a forward (or futures) contract and a source of funds to fulfill the contract. • In some situations, funds to fulfill the forward exchange contract are not already available or due to be received later, but must be purchased in the spot market at some future date. • This t ...
Paul de Grauwe
... The previous exchange rate models have been thoroughly tested since at least twenty years. Three major conclusions stand out from this vast empirical literature. First, even if economic agents were able to perfectly forecast the future path of the fundamentals, this would not produce a better foreca ...
... The previous exchange rate models have been thoroughly tested since at least twenty years. Three major conclusions stand out from this vast empirical literature. First, even if economic agents were able to perfectly forecast the future path of the fundamentals, this would not produce a better foreca ...
Sehlhorst, Daniel - University of Notre Dame
... weaknesses that disable economic markets from meeting the demands of its consumers. Venezuelan economic policy looks like Mexico’s during its Miracle, imposing high import barriers. Venezuela has flirted with reform, but inevitably decided to the choose power over the best interests of the populace. ...
... weaknesses that disable economic markets from meeting the demands of its consumers. Venezuelan economic policy looks like Mexico’s during its Miracle, imposing high import barriers. Venezuela has flirted with reform, but inevitably decided to the choose power over the best interests of the populace. ...
總體經濟學 期末考 日期：97
... pursued a policy of steady money growth. 6. The time between when a recession begins and when the central bank lowers interest rates to stimulate aggregate demand is an example of an: (A) inside lag of monetary policy. (C) inside lag of fiscal policy. (B) outside lag of monetary policy. (D) outside ...
... pursued a policy of steady money growth. 6. The time between when a recession begins and when the central bank lowers interest rates to stimulate aggregate demand is an example of an: (A) inside lag of monetary policy. (C) inside lag of fiscal policy. (B) outside lag of monetary policy. (D) outside ...
INTRODUCTION TO ECONOMICS SOLU TIONS 1
... (b) Discuss which factors might increase a country’s Terms of Trade and which factors might decrease its Terms of Trade. (10 marks) The following might lead to an increase in the Terms of Trade: A rise in the level of domestic inflation; an increase in importing countries exchange rate; changes in t ...
... (b) Discuss which factors might increase a country’s Terms of Trade and which factors might decrease its Terms of Trade. (10 marks) The following might lead to an increase in the Terms of Trade: A rise in the level of domestic inflation; an increase in importing countries exchange rate; changes in t ...
Purchasing power parity
... together in long run In the short run, exchange rates can deviate significantly from purchasing power parity, and the difference can be dramatic Purchasing power parity is most useful as a long-run benchmark for what the exchange rate should be as it is a poor predictor of the actual exchange rate ...
... together in long run In the short run, exchange rates can deviate significantly from purchasing power parity, and the difference can be dramatic Purchasing power parity is most useful as a long-run benchmark for what the exchange rate should be as it is a poor predictor of the actual exchange rate ...
NBER WORKING PAPER SERIES ADJUSTMENT IN THE WORLD ECONOMY
... that might lead one to suspect this First, even wi t h p erfect capit al mobility one should not expect the US budget defic it to crowd out only the trade balance, with no effect on domestic investment. The US is rou ghly a third of the world ...
... that might lead one to suspect this First, even wi t h p erfect capit al mobility one should not expect the US budget defic it to crowd out only the trade balance, with no effect on domestic investment. The US is rou ghly a third of the world ...
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... not, however, formally address the long-term adjustment process implicit in Keynesian models, conÞning himself to some prescient remarks on the long versus short-term responsiveness of the capital account. Mundell focused squarely on the dynamic effects of payments imbalances in his paper on “The In ...
... not, however, formally address the long-term adjustment process implicit in Keynesian models, conÞning himself to some prescient remarks on the long versus short-term responsiveness of the capital account. Mundell focused squarely on the dynamic effects of payments imbalances in his paper on “The In ...
AMG Macro Insight - HSBC Global Asset Management
... our portfolios, hedging currency exposure (using FX forwards) could make sense. But we need to recognise that the cost of hedging is not “frictionless”. A typical assumption is that the price of a currency hedge should be the differential in interest rates between the two economies concerned. But si ...
... our portfolios, hedging currency exposure (using FX forwards) could make sense. But we need to recognise that the cost of hedging is not “frictionless”. A typical assumption is that the price of a currency hedge should be the differential in interest rates between the two economies concerned. But si ...
Answer Key
... appreciations as they grow. Assuming uncovered interest parity is true in the long run, we should see that for developing economies with fixed exchange rates. a. PPP-converted GDP grows faster than exchange rate-converted GDP and inflation will be lower than in the USA. b. PPP-converted GDP grows fa ...
... appreciations as they grow. Assuming uncovered interest parity is true in the long run, we should see that for developing economies with fixed exchange rates. a. PPP-converted GDP grows faster than exchange rate-converted GDP and inflation will be lower than in the USA. b. PPP-converted GDP grows fa ...
Will the Renminbi replace the US Dollar as the world currency?
... China’s export comprises of 48% of the GDP and Chinese Renminbi appreciation will adversely affect the competitiveness of its export sector and economic growth. China’s Trilemma- In 1960, Noble prize winner Robert Mundell inferred that a country at one time can’t have an open capital account, along ...
... China’s export comprises of 48% of the GDP and Chinese Renminbi appreciation will adversely affect the competitiveness of its export sector and economic growth. China’s Trilemma- In 1960, Noble prize winner Robert Mundell inferred that a country at one time can’t have an open capital account, along ...
Notes on the Taylor Rule
... two terms in equation (1) will equal zero and the Federal Funds rate will be set at c. So c represents the interest rate that the Fed judges appropriate when the economy is doing “just fine.” Now suppose inflation is running above target. What should the Fed do? To slow down the inflation rate they ...
... two terms in equation (1) will equal zero and the Federal Funds rate will be set at c. So c represents the interest rate that the Fed judges appropriate when the economy is doing “just fine.” Now suppose inflation is running above target. What should the Fed do? To slow down the inflation rate they ...
National income accounting:
... decides to simulate aggregate demand by lowering taxes (T). What will happen in the short run (when the domestic price level and the price level in the rest of the world are constant) to GDP (Y), private consumption, interest rate, to the nominal and to the real exchange rate and to the trade balanc ...
... decides to simulate aggregate demand by lowering taxes (T). What will happen in the short run (when the domestic price level and the price level in the rest of the world are constant) to GDP (Y), private consumption, interest rate, to the nominal and to the real exchange rate and to the trade balanc ...
Jonathan Turnovsky PAPER SERIES
... Covered Interest Parity, Uncovered Interest Parity, and Exchange Rate Dynamics ...
... Covered Interest Parity, Uncovered Interest Parity, and Exchange Rate Dynamics ...
Currency crises and monetary policy in an economy with credit
... lower pro)ts reduce net worth, it may result in less investment and lower output in the next period. This, in turn, brings a fall in the demand for money, and thus a currency depreciation. But arbitrage in the foreign exchange market then implies that the currency must depreciate in the current peri ...
... lower pro)ts reduce net worth, it may result in less investment and lower output in the next period. This, in turn, brings a fall in the demand for money, and thus a currency depreciation. But arbitrage in the foreign exchange market then implies that the currency must depreciate in the current peri ...
Economics
... (iii) Borrowing by a government represents a situation of fiscal deficit. *Devaluation is the fall in the value of domestic currency in relation to foreign currency as planned by the government in a situation when exchange rate is not determined by the forces of demand & supply but is fixed by the g ...
... (iii) Borrowing by a government represents a situation of fiscal deficit. *Devaluation is the fall in the value of domestic currency in relation to foreign currency as planned by the government in a situation when exchange rate is not determined by the forces of demand & supply but is fixed by the g ...
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.