Money and Monetary Policy
... The reserve requirement (reserve ratio) is the percent of deposits that banks must hold in reserve (the percent they can NOT loan out) • When the FED increases the money supply it increases the amount of money held in bank deposits. • As banks keeps some of the money in reserve and loans out their e ...
... The reserve requirement (reserve ratio) is the percent of deposits that banks must hold in reserve (the percent they can NOT loan out) • When the FED increases the money supply it increases the amount of money held in bank deposits. • As banks keeps some of the money in reserve and loans out their e ...
AP Macro 4-6 Unit Summary
... The reserve requirement (reserve ratio) is the percent of deposits that banks must hold in reserve (the percent they can NOT loan out) • When the FED increases the money supply it increases the amount of money held in bank deposits. • As banks keeps some of the money in reserve and loans out their e ...
... The reserve requirement (reserve ratio) is the percent of deposits that banks must hold in reserve (the percent they can NOT loan out) • When the FED increases the money supply it increases the amount of money held in bank deposits. • As banks keeps some of the money in reserve and loans out their e ...
Ch. 27
... Budget deficits in other countries 1. Bond finance hard 2. Deficit likely to lead to money creation and Budget deficits in U.S. 1. Large capital market, so can bond finance 2. Fed has choice whether to monetize deficit, but may be pressured to do so 3. Ricardian equivalence may mean no effect of b ...
... Budget deficits in other countries 1. Bond finance hard 2. Deficit likely to lead to money creation and Budget deficits in U.S. 1. Large capital market, so can bond finance 2. Fed has choice whether to monetize deficit, but may be pressured to do so 3. Ricardian equivalence may mean no effect of b ...
Document
... in such a way as to bring about continued increases in aggregate demand is the money supply. Money Supply is the only factor that can continually increase without causing a reduction in one of the four components of total expenditures: consumption, investment, government purchases, or net exports. ...
... in such a way as to bring about continued increases in aggregate demand is the money supply. Money Supply is the only factor that can continually increase without causing a reduction in one of the four components of total expenditures: consumption, investment, government purchases, or net exports. ...
Fiscal Policy--String Theory
... “pushing on a string”—a metaphor for ineffective action. Increasingly, policymakers are looking to fiscal policy to fix what ails the global economy. But what do these terms mean? Monetary policy refers to the management of the money supply and interest rates within a country, or in the case of the ...
... “pushing on a string”—a metaphor for ineffective action. Increasingly, policymakers are looking to fiscal policy to fix what ails the global economy. But what do these terms mean? Monetary policy refers to the management of the money supply and interest rates within a country, or in the case of the ...
Chapter 26 Money and Economic Stability in the ISLM World
... that policy makers do not have the information or the skill to make it more stable. In contrast, Keynesians believe that the economy is sufficiently unstable that, although policy cannot make it work perfectly, it can surely improve how it works. This chapter provides some historical perspective on ...
... that policy makers do not have the information or the skill to make it more stable. In contrast, Keynesians believe that the economy is sufficiently unstable that, although policy cannot make it work perfectly, it can surely improve how it works. This chapter provides some historical perspective on ...
Chap016
... • Need to put people to work. • The GDP gap must be closed: – The GDP gap is the difference between full-employment output and the amount of output demanded at current price levels. ...
... • Need to put people to work. • The GDP gap must be closed: – The GDP gap is the difference between full-employment output and the amount of output demanded at current price levels. ...
° Money and Inflation Introduction Quantity Equation elQuantity
... interest rate they do not know what the inflation rate will be. Let "Tr" denote the actual future inflation and "Tr." the expectation of future inflation. This gives us Jr = i — 7r the ex ante real interest rate... We call our original formula for real interest rate the ex post real interest rate. ...
... interest rate they do not know what the inflation rate will be. Let "Tr" denote the actual future inflation and "Tr." the expectation of future inflation. This gives us Jr = i — 7r the ex ante real interest rate... We call our original formula for real interest rate the ex post real interest rate. ...
Powerpoint Presentation
... Price levels move independently of relative prices. If the relative price of one thing goes up, logically the relative price of another thing must go down. ...
... Price levels move independently of relative prices. If the relative price of one thing goes up, logically the relative price of another thing must go down. ...
AP-Macro-Unit-4-Summary-2
... Nominal vs. Real Interest Rates Example: • You lend out $100 with 20% interest. • Prices are expected to increased 15% • In a year you get paid back $120. • What is the nominal and what is the real interest rate? • The Nominal interest rate is 20% • The Real interest rate was only 5% • In reality, ...
... Nominal vs. Real Interest Rates Example: • You lend out $100 with 20% interest. • Prices are expected to increased 15% • In a year you get paid back $120. • What is the nominal and what is the real interest rate? • The Nominal interest rate is 20% • The Real interest rate was only 5% • In reality, ...
where does come from?
... 6.3. The effect of government borrowing on the money supply: ‘crowding out’ ....... 124 6.3.1. Linking fiscal policy to increased credit creation .................................................................................. 126 6.4. Foreign exchange, international capital flows and the eff ...
... 6.3. The effect of government borrowing on the money supply: ‘crowding out’ ....... 124 6.3.1. Linking fiscal policy to increased credit creation .................................................................................. 126 6.4. Foreign exchange, international capital flows and the eff ...
101 SAMPLE FINAL-Rest of final - Professor Dohan`s Website
... The reason banks must keep at least 12.5% of demand deposits on reserve with the Fed is to____ The interest rate for lending excess reserves by one commercial bank to another commercial bank is called_____ The rate charged to commercial banks for borrowing reserves from the “central bank” is called ...
... The reason banks must keep at least 12.5% of demand deposits on reserve with the Fed is to____ The interest rate for lending excess reserves by one commercial bank to another commercial bank is called_____ The rate charged to commercial banks for borrowing reserves from the “central bank” is called ...
Lecture 15: Money - Development of e
... gives reasons for changes in the general price level. According to this theory, an increase in the quantity of money in country will lead to a rise in the price level. On the other hand, a decrease in the quantity of money in the country will lead to a fall in the price level. It is also asserted th ...
... gives reasons for changes in the general price level. According to this theory, an increase in the quantity of money in country will lead to a rise in the price level. On the other hand, a decrease in the quantity of money in the country will lead to a fall in the price level. It is also asserted th ...
The Digital Economist
... Demand-side policies may be expansionary or contractionary in nature. Expansionary policies are designed to stimulate spending in a recessionary economy; contractionary policies designed to reduce spending in an inflationary economy. However, supply-side policies should always be expansionary--the g ...
... Demand-side policies may be expansionary or contractionary in nature. Expansionary policies are designed to stimulate spending in a recessionary economy; contractionary policies designed to reduce spending in an inflationary economy. However, supply-side policies should always be expansionary--the g ...
The Great Deformation Book Report
... So the disciples of Friedman recommended to the president of the United States that the world’s richest nation default on its debt obligations, an act so perfidious that even J. M. Keynes himself might have abjured. Secretary Dillon’s initiatives to defend Bretton Woods also had an advantage that wo ...
... So the disciples of Friedman recommended to the president of the United States that the world’s richest nation default on its debt obligations, an act so perfidious that even J. M. Keynes himself might have abjured. Secretary Dillon’s initiatives to defend Bretton Woods also had an advantage that wo ...
of monetary policy
... aggressive and creative policy actions, many of which are reflected in the size and composition of the Fed's balance sheet. So, I thought that a brief guided tour of our balance sheet might be an instructive way to discuss the Fed's policy strategy and some related issues. As I will discuss, we no l ...
... aggressive and creative policy actions, many of which are reflected in the size and composition of the Fed's balance sheet. So, I thought that a brief guided tour of our balance sheet might be an instructive way to discuss the Fed's policy strategy and some related issues. As I will discuss, we no l ...
Notes
... money. Individuals must make efforts as a substitute for the convenience of holding money. • Menu Costs – Firms must engage in costs of changing posted prices. More generally, when prices change rapidly over time, more time and effort must be put into calculating relative prices. ...
... money. Individuals must make efforts as a substitute for the convenience of holding money. • Menu Costs – Firms must engage in costs of changing posted prices. More generally, when prices change rapidly over time, more time and effort must be put into calculating relative prices. ...
SECTION 6: Inflation, Unemployment, & Stabilization Policies Need to Know Budget balance—savings by government—is defined by:
... Due to the falling price level, a dollar in the future has a higher real value than a dollar today. So lenders, who are owed money, gain under deflation because the real value of borrowers’ payments increases. Borrowers lose because the real burden of their debt rises. B. Effects of Expected Def ...
... Due to the falling price level, a dollar in the future has a higher real value than a dollar today. So lenders, who are owed money, gain under deflation because the real value of borrowers’ payments increases. Borrowers lose because the real burden of their debt rises. B. Effects of Expected Def ...