Multiple Choice Tutorial Chapter 12 Fiscal Policy
... 11. A $100 billion dollar increase in government spending increases real GDP more than a $100 billion reduction in net taxes because a. some of the dollars consumers gain from the tax reduction will be saved. b. some of the dollars consumers gain from the tax reduction will be spent on services. c. ...
... 11. A $100 billion dollar increase in government spending increases real GDP more than a $100 billion reduction in net taxes because a. some of the dollars consumers gain from the tax reduction will be saved. b. some of the dollars consumers gain from the tax reduction will be spent on services. c. ...
Spring 2009
... 11. An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called: (a) procyclical. (b) countercyclical. (c) acyclical. (d) a leading variable. 12. A variable that tends to move in advance of aggregate economic activity is cal ...
... 11. An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called: (a) procyclical. (b) countercyclical. (c) acyclical. (d) a leading variable. 12. A variable that tends to move in advance of aggregate economic activity is cal ...
lecture notes
... Introduction: Disagreements about Macro Theory and Policy A. Learning objectives – In this chapter the students will learn: 1. The differences between the historical Keynesian and classical macro perspectives. 2. About alternative perspectives on the causes of macroeconomic instability, including vi ...
... Introduction: Disagreements about Macro Theory and Policy A. Learning objectives – In this chapter the students will learn: 1. The differences between the historical Keynesian and classical macro perspectives. 2. About alternative perspectives on the causes of macroeconomic instability, including vi ...
The NAIRU and the Natural Rate of Unemployment
... version and the Keynesian economy views economy as a system that tends to fluctuate around its dynamic equilibrium. Economic equilibrium is the term that is relatively hard to be described in theoretical terms and rendered in empirical terms. One of the key images of macroeconomic equilibrium is pot ...
... version and the Keynesian economy views economy as a system that tends to fluctuate around its dynamic equilibrium. Economic equilibrium is the term that is relatively hard to be described in theoretical terms and rendered in empirical terms. One of the key images of macroeconomic equilibrium is pot ...
Estimating Okun`s Law for Malta
... instance, in 2012, the lowest unemployment rate in the European Union was registered in Austria, at 4.3%, whereas in Spain it stood at 25%. Youth unemployment has reached even more alarming figures in some countries, exceeding 50% in Spain and Greece. At 6.4% in 2012, the unemployment rate in Malta ...
... instance, in 2012, the lowest unemployment rate in the European Union was registered in Austria, at 4.3%, whereas in Spain it stood at 25%. Youth unemployment has reached even more alarming figures in some countries, exceeding 50% in Spain and Greece. At 6.4% in 2012, the unemployment rate in Malta ...
Ch. 10-11 GDP, CPI, Unemployment PP
... How does the Government help the Unemployed? 1) UNEMPLOYMENT INSURANCE is a government program that partially protects workers’ incomes when they become unemployed. Offers partial payment of former wages for a limited time to those who are laid off. ...
... How does the Government help the Unemployed? 1) UNEMPLOYMENT INSURANCE is a government program that partially protects workers’ incomes when they become unemployed. Offers partial payment of former wages for a limited time to those who are laid off. ...
國立嘉義大學95學年度
... variable input eventually diminishes. D) a firm uses more of a variable input, given the quantity of fixed inputs, the firm’s average total cost will decrease eventually. ...
... variable input eventually diminishes. D) a firm uses more of a variable input, given the quantity of fixed inputs, the firm’s average total cost will decrease eventually. ...
Debates in Macroeconomics: Monetarism, New
... • Among the criticisms of supply-side economics is that it is unlikely a tax cut would substantially increase the supply of labor. • In theory, a tax cut could even lead to a reduction in labor supply – hang out at the pool. • Research done during the 1980s suggests that tax cuts seem to increase th ...
... • Among the criticisms of supply-side economics is that it is unlikely a tax cut would substantially increase the supply of labor. • In theory, a tax cut could even lead to a reduction in labor supply – hang out at the pool. • Research done during the 1980s suggests that tax cuts seem to increase th ...
Debates in Macroeconomics: Monetarism, New
... • Among the criticisms of supply-side economics is that it is unlikely a tax cut would substantially increase the supply of labor. • In theory, a tax cut could even lead to a reduction in labor supply – hang out at the pool. • Research done during the 1980s suggests that tax cuts seem to increase th ...
... • Among the criticisms of supply-side economics is that it is unlikely a tax cut would substantially increase the supply of labor. • In theory, a tax cut could even lead to a reduction in labor supply – hang out at the pool. • Research done during the 1980s suggests that tax cuts seem to increase th ...
The 'Centralization of Wage Bargaining' revisited: What have we learnt about wage behaviour in EMU?
... unemployment plotted against coordination and centralization for the OECD countries, as it done in figures 3 and 4. The data are unemployment averaged over the period 2000-2003 (four annual observations) and the coordination and centralization figures for 2000 (OECD data). What do we find? There are ...
... unemployment plotted against coordination and centralization for the OECD countries, as it done in figures 3 and 4. The data are unemployment averaged over the period 2000-2003 (four annual observations) and the coordination and centralization figures for 2000 (OECD data). What do we find? There are ...
GDP, inflation and unemployment
... 2-3 The Inflation Rate Figure 2-4 Inflation rate, using the CPI and the GDP ...
... 2-3 The Inflation Rate Figure 2-4 Inflation rate, using the CPI and the GDP ...
Chapter 16 - Central Web Server 2
... matter when it comes to understanding the behavior of inflation and unemployment? • When unemployment is low, firms compete for workers and bid up wages sharply. • When unemployment is high, it is more difficult for firms to cut wages because workers tend to resist wage cuts. Result: Even if the tot ...
... matter when it comes to understanding the behavior of inflation and unemployment? • When unemployment is low, firms compete for workers and bid up wages sharply. • When unemployment is high, it is more difficult for firms to cut wages because workers tend to resist wage cuts. Result: Even if the tot ...
macroeconomic principles (econ
... The SRAS curve shift up until equilibrium is restored (point c). The real wage returns to its original level, so does employment and output. Notice the unemployment rate fell below U* as prices increased. This short run trade-off between inflation and unemployment is called the Phillips curve. ...
... The SRAS curve shift up until equilibrium is restored (point c). The real wage returns to its original level, so does employment and output. Notice the unemployment rate fell below U* as prices increased. This short run trade-off between inflation and unemployment is called the Phillips curve. ...
Macro_online_chapter_10_14e
... Factors that shift LRAS: 1) Changes in the resource base 2) Changes in technology 3) Changes in institutional arrangements (i.e. the “rules”) ...
... Factors that shift LRAS: 1) Changes in the resource base 2) Changes in technology 3) Changes in institutional arrangements (i.e. the “rules”) ...
National Income and Price Determination
... market self-correct. If government were to act, it would be to decrease AD, which means typically higher taxes and/or decreased government spending to create even lower prices. No politician would do this if they value their political hides. Negative supply shock. Cause recessionary gap. APL increas ...
... market self-correct. If government were to act, it would be to decrease AD, which means typically higher taxes and/or decreased government spending to create even lower prices. No politician would do this if they value their political hides. Negative supply shock. Cause recessionary gap. APL increas ...
Figures and Comments - Federal Reserve Bank of Boston
... continued movement towards the Federal Reserve’s 2 percent inflation target ...
... continued movement towards the Federal Reserve’s 2 percent inflation target ...
Economists and the Real World
... influence and involvement outside was substantial. In 1930 he was appointed to a Committee of the Economic Advisory Council, chaired by Keynes, whose task was to identify the causes and remedies for the developing slump. Robbins and Keynes had very different views – Keynes was groping towards the id ...
... influence and involvement outside was substantial. In 1930 he was appointed to a Committee of the Economic Advisory Council, chaired by Keynes, whose task was to identify the causes and remedies for the developing slump. Robbins and Keynes had very different views – Keynes was groping towards the id ...
Price level (P) Real GDP (Y) B′ Note that output (Y) has not
... possess perfect information and that markets clear, i.e. are typified by perfectly flexible wages and prices. The upshot of these assumptions, when applied to the short run with a fixed capital stock, is that output is totally determined by autonomous supply factors. In this model, money is the majo ...
... possess perfect information and that markets clear, i.e. are typified by perfectly flexible wages and prices. The upshot of these assumptions, when applied to the short run with a fixed capital stock, is that output is totally determined by autonomous supply factors. In this model, money is the majo ...
Clashing Theories: Why Is Unemployment So High When Interest
... zero, it has no further effect. If the public expects less than a critical rate of inflation, the corresponding real rate (minus the expected rate of inflation) will exceed the fullutilization real rate. Excess supply of current output will prevail because of the public’s desire to defer consumption ...
... zero, it has no further effect. If the public expects less than a critical rate of inflation, the corresponding real rate (minus the expected rate of inflation) will exceed the fullutilization real rate. Excess supply of current output will prevail because of the public’s desire to defer consumption ...
Aggregate Demand and Aggregate Supply
... 4. Which of the following would not cause a shift in the long-run aggregate supply curve? a. an increase in available labor b. an increase in available capital c. an increase in available technology d. an increase in price expectations e. All of the above shift the long-run aggregate supply curve. 5 ...
... 4. Which of the following would not cause a shift in the long-run aggregate supply curve? a. an increase in available labor b. an increase in available capital c. an increase in available technology d. an increase in price expectations e. All of the above shift the long-run aggregate supply curve. 5 ...
Milton Friedman
... • Monetary policy should follow simple rules and not try to adjust to shifting economic situations. – In particular, if an economy’s GDP normally grows at the rate of 3.5% per year, then its central bank should increase the quantity of money at the same rate every year. This will keep prices stable ...
... • Monetary policy should follow simple rules and not try to adjust to shifting economic situations. – In particular, if an economy’s GDP normally grows at the rate of 3.5% per year, then its central bank should increase the quantity of money at the same rate every year. This will keep prices stable ...
Full employment
Full employment, in macroeconomics, is the level of employment rates where there is no cyclical or deficient-demand unemployment. It is defined by the majority of mainstream economists as being an acceptable level of unemployment somewhere above 0%. The discrepancy from 0% arises due to non-cyclical types of unemployment, such as frictional unemployment (there will always be people who have quit or have lost a seasonal job and are in the process of getting a new job) and structural unemployment (mismatch between worker skills and job requirements). Unemployment above 0% is seen as necessary to control inflation in capitalist economies, to keep inflation from accelerating, i.e., from rising from year to year. This view is based on a theory centering on the concept of the Non-Accelerating Inflation Rate of Unemployment (NAIRU); in the current era, the majority of mainstream economists mean NAIRU when speaking of ""full"" employment. The NAIRU has also been described by Milton Friedman, among others, as the ""natural"" rate of unemployment. Having many names, it has also been called the structural unemployment rate.The 20th century British economist William Beveridge stated that an unemployment rate of 3% was full employment. Other economists have provided estimates between 2% and 13%, depending on the country, time period, and their political biases. For the United States, economist William T. Dickens found that full-employment unemployment rate varied a lot over time but equaled about 5.5 percent of the civilian labor force during the 2000s. Recently, economists have emphasized the idea that full employment represents a ""range"" of possible unemployment rates. For example, in 1999, in the United States, the Organisation for Economic Co-operation and Development (OECD) gives an estimate of the ""full-employment unemployment rate"" of 4 to 6.4%. This is the estimated unemployment rate at full employment, plus & minus the standard error of the estimate.The concept of full employment of labor corresponds to the concept of potential output or potential real GDP and the long run aggregate supply (LRAS) curve. In neoclassical macroeconomics, the highest sustainable level of aggregate real GDP or ""potential"" is seen as corresponding to a vertical LRAS curve: any increase in the demand for real GDP can only lead to rising prices in the long run, while any increase in output is temporary.