M11_ABEL4987_7E_IM_C11
... b. Since prices are sticky in the short run in the Keynesian model, the price level doesn’t adjust to restore general equilibrium (1) Keynesians assume that when not in general equilibrium, the economy lies at the intersection of the IS and LM curves, and may be off the FE line (2) This represents t ...
... b. Since prices are sticky in the short run in the Keynesian model, the price level doesn’t adjust to restore general equilibrium (1) Keynesians assume that when not in general equilibrium, the economy lies at the intersection of the IS and LM curves, and may be off the FE line (2) This represents t ...
nci 03.04.17 20:59:35
... question(s) you do not want marked. If you do not cancel extra questions, the examiner will mark the questions in the order presented in your answer book until the required number of questions have been marked. ...
... question(s) you do not want marked. If you do not cancel extra questions, the examiner will mark the questions in the order presented in your answer book until the required number of questions have been marked. ...
Crowding Out - MIT Economics
... mechanism is the effect of government debt on interest rates; empirical evidence, both across countries and from the last two centuries, shows surprisingly little relation between the two. This probably reflects, however, more the difficulty of identifying and controlling for other factors than the ab ...
... mechanism is the effect of government debt on interest rates; empirical evidence, both across countries and from the last two centuries, shows surprisingly little relation between the two. This probably reflects, however, more the difficulty of identifying and controlling for other factors than the ab ...
Aggregate Supply
... I. AD/AS Model • To Analyze changes in real GDP & price level simultaneously • Provides insights on inflation, unemployment, & economic growth • Aggregate Demand – Amounts of real output – Buyers collectively desire – At each possible price level ...
... I. AD/AS Model • To Analyze changes in real GDP & price level simultaneously • Provides insights on inflation, unemployment, & economic growth • Aggregate Demand – Amounts of real output – Buyers collectively desire – At each possible price level ...
Chapter 7
... What is an expansionary fiscal policy? An increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand ...
... What is an expansionary fiscal policy? An increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand ...
Fiscal Policy
... What is an expansionary fiscal policy? An increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand ...
... What is an expansionary fiscal policy? An increase in government purchases, decrease in net taxes, or some combination of the two aimed at increasing aggregate demand ...
G:\Website\Research Posted on Website\Price Instability.pmd
... present and will continue to be so, total debt issuance— public plus private—is much smaller than it has been in recent years, and it will remain depressed. Public debt growth may have accelerated to roughly $2 trillion annual rate, but net private debt issuance will likely be minimal or negative fo ...
... present and will continue to be so, total debt issuance— public plus private—is much smaller than it has been in recent years, and it will remain depressed. Public debt growth may have accelerated to roughly $2 trillion annual rate, but net private debt issuance will likely be minimal or negative fo ...
Macroeconomic Past Paper Questions and Mark
... a definition of the multiplier a definition of national income an explanation of the multiplier and its effect on national income an identification of leakages/withdrawals and injections/additions as factors that determine the size of the multiplier an explanation that the size of the multiplier dep ...
... a definition of the multiplier a definition of national income an explanation of the multiplier and its effect on national income an identification of leakages/withdrawals and injections/additions as factors that determine the size of the multiplier an explanation that the size of the multiplier dep ...
Answers to Homework #3
... institutions as well as discouraged workers who cannot find work Suppose that the Kingdom of Workers (KOW) is a country which has exactly the same amount of labor force, employed and unemployed workers as Wisconsin in December 2010. Among those 227678 unemployed workers in the KOW, 60000 of them are ...
... institutions as well as discouraged workers who cannot find work Suppose that the Kingdom of Workers (KOW) is a country which has exactly the same amount of labor force, employed and unemployed workers as Wisconsin in December 2010. Among those 227678 unemployed workers in the KOW, 60000 of them are ...
Document
... Production is less attractive to firms because the prices they receive for their output are on average lower than they expected However, many of their production costs, such as the nominal wage, do not fall production is less profitable than expected firms reduce their quantity supplied the ec ...
... Production is less attractive to firms because the prices they receive for their output are on average lower than they expected However, many of their production costs, such as the nominal wage, do not fall production is less profitable than expected firms reduce their quantity supplied the ec ...
Page 277
... expect the future to be similar to the present and recent past. As of this time, inflation rates are low. Inflation rates have been low for several years. With adaptive expectations, people would then assume that the inflation rate will also be low next year. We will not come to expect higher rates ...
... expect the future to be similar to the present and recent past. As of this time, inflation rates are low. Inflation rates have been low for several years. With adaptive expectations, people would then assume that the inflation rate will also be low next year. We will not come to expect higher rates ...
III. Economic Development and Economic policies before WWI
... • Time horizon “sufficiently” short for capital and total labor force fixed. • Time horizon “sufficiently” long for the adjustment of perfectly flexible prices, thus ensuring the simultaneous equilibrium on all markets • In particular, this applies for labor market, where there is no possibility of ...
... • Time horizon “sufficiently” short for capital and total labor force fixed. • Time horizon “sufficiently” long for the adjustment of perfectly flexible prices, thus ensuring the simultaneous equilibrium on all markets • In particular, this applies for labor market, where there is no possibility of ...
Document
... Economy operating at natural rate of unemployment (anyone wanting job=have it.) Equate the LRAS curve with bowed line on PPC. To extend either would be to discover new resources – R&D ...
... Economy operating at natural rate of unemployment (anyone wanting job=have it.) Equate the LRAS curve with bowed line on PPC. To extend either would be to discover new resources – R&D ...
Aggregate Supply
... quantity of output supplied by all firms and the overall price level. It is not the sum of individual firm supply curves. It is the relationship between production and the price level. It does not hold costs and prices constant, as in ...
... quantity of output supplied by all firms and the overall price level. It is not the sum of individual firm supply curves. It is the relationship between production and the price level. It does not hold costs and prices constant, as in ...
According to estimates from MassBenchmarks, Massachusetts real gross domestic product
... latter two sectors are expected to be 3.0 and 1.3% higher than before the recession, respectively. Trade, transportation, and utilities; and financial actives will have slightly fewer jobs than before the recession, lower by 1.2% for trade, transportation, and utilities; and by 2.5% for financial ac ...
... latter two sectors are expected to be 3.0 and 1.3% higher than before the recession, respectively. Trade, transportation, and utilities; and financial actives will have slightly fewer jobs than before the recession, lower by 1.2% for trade, transportation, and utilities; and by 2.5% for financial ac ...
price level
... i. Recall real growth rates are adjusted for inflation. If prices double, GDP should double. But GDP adjusted for inflation should be the same. ii. One of the most fundamental assumptions of the LRAS is that wages and prices are completely flexible—that’s what the “long-run” means. iii. Thus higher ...
... i. Recall real growth rates are adjusted for inflation. If prices double, GDP should double. But GDP adjusted for inflation should be the same. ii. One of the most fundamental assumptions of the LRAS is that wages and prices are completely flexible—that’s what the “long-run” means. iii. Thus higher ...
Mankiw 5/e Chapter 13: Aggregate Supply
... and the Phillips Curve The Phillips curve states that depends on ...
... and the Phillips Curve The Phillips curve states that depends on ...
File - Economy Unit Portfolio
... Each hat you make and sell brings in $30 in profit, and each belt brings in $20. To make more money, you shift more workers from belt production to hats. Some workers can make a hat just as quickly as a belt, so the opportunity cost it low: You give up $20 to make $30. But others are belt specialist ...
... Each hat you make and sell brings in $30 in profit, and each belt brings in $20. To make more money, you shift more workers from belt production to hats. Some workers can make a hat just as quickly as a belt, so the opportunity cost it low: You give up $20 to make $30. But others are belt specialist ...
On the Enlightenment from Danish Flexibility Labor Market
... Since the 1980s, faced with serious recession, sustained increase in unemployment and a large number of long-term unemployed, Western countries have introduced the reform of labor market flexibility. The flexibility of the employment relations is recognized as an important way to increase the countr ...
... Since the 1980s, faced with serious recession, sustained increase in unemployment and a large number of long-term unemployed, Western countries have introduced the reform of labor market flexibility. The flexibility of the employment relations is recognized as an important way to increase the countr ...
Monthly Business Dashboard – October 2011
... in September.6 House price inflation in Hampshire has eased to within the range where the rate is expected to be 99% of the time over the long-run (amber area). Instead of just looking at the latest increases in house prices relative to historic averages it is equally important to view house price i ...
... in September.6 House price inflation in Hampshire has eased to within the range where the rate is expected to be 99% of the time over the long-run (amber area). Instead of just looking at the latest increases in house prices relative to historic averages it is equally important to view house price i ...
PROBLEM SET 3 14.02 Macroeconomics March 15, 2006 Due March 22, 2006
... 3. The aggregate supply curve is upward sloping because firms produce more goods at higher prices. Ans: False. The AS curve is upward sloping because higher output means a lower unemployment rate, which enhances workers’ bargaining power and results in a higher real wage for a given expected price l ...
... 3. The aggregate supply curve is upward sloping because firms produce more goods at higher prices. Ans: False. The AS curve is upward sloping because higher output means a lower unemployment rate, which enhances workers’ bargaining power and results in a higher real wage for a given expected price l ...
File
... Discuss why, in contrast to the Monetarist/New Classical model, the economy can remain stuck in a deflationary (recessionary) gap in the Keynesian model. Explain, using a diagram, that if AD increases in the vertical section of the AS curve, then there is an inflationary gap. Discuss why, in contras ...
... Discuss why, in contrast to the Monetarist/New Classical model, the economy can remain stuck in a deflationary (recessionary) gap in the Keynesian model. Explain, using a diagram, that if AD increases in the vertical section of the AS curve, then there is an inflationary gap. Discuss why, in contras ...
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.