Power Point - The University of Chicago Booth School of Business
... Deflation can make borrowers - either consumers or firms, worse off. As we saw early in the course, unexpected inflation makes borrowers better off. They expected to pay a certain real rate and when inflation is higher and the nominal rate is fixed, the real rate they pay is lower (in terms of lost ...
... Deflation can make borrowers - either consumers or firms, worse off. As we saw early in the course, unexpected inflation makes borrowers better off. They expected to pay a certain real rate and when inflation is higher and the nominal rate is fixed, the real rate they pay is lower (in terms of lost ...
IS-LM/AD-AS - KsuWeb Home Page
... causing a fall in unemployment below the natural rate. • Nominal wages were controlled by wage and price controls during much of WWII. ...
... causing a fall in unemployment below the natural rate. • Nominal wages were controlled by wage and price controls during much of WWII. ...
Modern Principles, Macroeconomics
... 2) Does an analysis of real shocks add to an analysis of aggregate demand shocks? Absolutely. In our view, a key problem with many textbooks is that they make fiscal and monetary policy look too easy. In the standard P,Y model the economy can always be restored to full employment by shifting the rig ...
... 2) Does an analysis of real shocks add to an analysis of aggregate demand shocks? Absolutely. In our view, a key problem with many textbooks is that they make fiscal and monetary policy look too easy. In the standard P,Y model the economy can always be restored to full employment by shifting the rig ...
Chapter 20 – Practice Questions 1. Which of the following is correct
... b. They are associated with comparatively large declines in investment spending. c. They are any period when real GDP growth is less than average. d. They tend to be associated with falling unemployment rates. ...
... b. They are associated with comparatively large declines in investment spending. c. They are any period when real GDP growth is less than average. d. They tend to be associated with falling unemployment rates. ...
Lecture 10
... 1. Demand Pull Inflation: assume that the economy is at its full capacity of production. Assume that total spending is greater than production level… what will happen to price level? ...
... 1. Demand Pull Inflation: assume that the economy is at its full capacity of production. Assume that total spending is greater than production level… what will happen to price level? ...
Production Possibilities Curve/Frontier
... Depending on where an economy is during its economic fluctuations /business cycle, this determines the location of the dot. On either line indicates efficient or production efficient (the maximum amount that can be produced with the available resources at that time). On either line also indicates fu ...
... Depending on where an economy is during its economic fluctuations /business cycle, this determines the location of the dot. On either line indicates efficient or production efficient (the maximum amount that can be produced with the available resources at that time). On either line also indicates fu ...
Detailed solutions to multiple choices of PS #2
... cost of living, and firms will grant this request as they know they can charge higher nominal prices for their output. There will be no change in output and employment. 7. By the Lucas Critique, agents have rational expectations. The reason why agents can’t make the correct decisions is that they d ...
... cost of living, and firms will grant this request as they know they can charge higher nominal prices for their output. There will be no change in output and employment. 7. By the Lucas Critique, agents have rational expectations. The reason why agents can’t make the correct decisions is that they d ...
Inflation
... cost isn't high. Conflict can arise when there is unanticipated inflation, like: (1) Creditors lose and debtors gain if the lender does not anticipate inflation correctly. For those who borrow, this is similar to getting an interest-free loan. (2) Uncertainty about what will happen next makes corpor ...
... cost isn't high. Conflict can arise when there is unanticipated inflation, like: (1) Creditors lose and debtors gain if the lender does not anticipate inflation correctly. For those who borrow, this is similar to getting an interest-free loan. (2) Uncertainty about what will happen next makes corpor ...
unemployed
... The unemployment rate is the percentage of the people in the labor force who are unemployed. Number of people unemployed Unemployment rate = ...
... The unemployment rate is the percentage of the people in the labor force who are unemployed. Number of people unemployed Unemployment rate = ...
NBER WORKING PAPER LIGHT OF THEORETICAL DEVELOPMENTS POLICY
... rational expectations theory has taught us, in spite of its new classical guise, is there to stay and make macroeconomics a very different discipline from that which we were taught in our youth. But there is a basic sense in which I must confess to having remained a Keynesian, albeit an eclectic one ...
... rational expectations theory has taught us, in spite of its new classical guise, is there to stay and make macroeconomics a very different discipline from that which we were taught in our youth. But there is a basic sense in which I must confess to having remained a Keynesian, albeit an eclectic one ...
inflation: danger ahead? - Crawford Investment Counsel
... is the difference between actual and potential economic output. With unemployment still high at over 7%, capacity utilization of under 80%, and a glut of cheap money worldwide that is available to increase capacity, it is difficult to see how a major or widespread inflation could be ignited. Slack in ...
... is the difference between actual and potential economic output. With unemployment still high at over 7%, capacity utilization of under 80%, and a glut of cheap money worldwide that is available to increase capacity, it is difficult to see how a major or widespread inflation could be ignited. Slack in ...
The Aggregate Demand -- Aggregate Supply Model
... Variables that enhance production shift the SAS curve rightward. Variables that hinder production shift the SAS curve leftward. ...
... Variables that enhance production shift the SAS curve rightward. Variables that hinder production shift the SAS curve leftward. ...
Employment Policies - ITC-ILO
... these may be a temporary response to specific shocks and crises, public works programmes can also have a longer-term horizon. • Employment Guarantee Programmes / Schemes (EGP/S) which refer to long-term rights-based programmes in which some level of entitlement to work is provided. ...
... these may be a temporary response to specific shocks and crises, public works programmes can also have a longer-term horizon. • Employment Guarantee Programmes / Schemes (EGP/S) which refer to long-term rights-based programmes in which some level of entitlement to work is provided. ...
3B Semester 1 Examination 2011 Penrhos College
... a) the increase in the cash rate from 3.00% to 4.50% over the same period. b) the increase in the value of the Australian dollar from 81 US cents to 90 US cents over the same period. c) the increase in the inflation rate from 1.5% to 2.1% over the same period. d) the increase in the rate of economic ...
... a) the increase in the cash rate from 3.00% to 4.50% over the same period. b) the increase in the value of the Australian dollar from 81 US cents to 90 US cents over the same period. c) the increase in the inflation rate from 1.5% to 2.1% over the same period. d) the increase in the rate of economic ...
ECON 111-01A Dr. John F. Olson Introduction to Economics Spring
... need to hold more money for transactions which increases the demand for money, raising the interest rate which reduces investment (I) spending, (3) the exchange rate effect – as the domestic price level rises relative to prices in the rest of the world, this reduces the demand for exports and increa ...
... need to hold more money for transactions which increases the demand for money, raising the interest rate which reduces investment (I) spending, (3) the exchange rate effect – as the domestic price level rises relative to prices in the rest of the world, this reduces the demand for exports and increa ...
Economics 302
... d. (4 points) Describe what happens in the short run and in the long-run to the equilibrium level of output and equilibrium price level if the hurricane season destroys most crops and reduces the food supply. The reduction in food supply pushes up food prices and shifts the short-run aggregate supp ...
... d. (4 points) Describe what happens in the short run and in the long-run to the equilibrium level of output and equilibrium price level if the hurricane season destroys most crops and reduces the food supply. The reduction in food supply pushes up food prices and shifts the short-run aggregate supp ...
Unemployment in Nigeria: A Time Bomb Waiting To Explode: Issues
... seasonally, due to the nature of the job they do, .agriculture workers in developing countries may be laid off during the growing season. 2. Structural Unemployment: Structural unemployment could also results from persistent cyclical unemployment, that is, if the econom ...
... seasonally, due to the nature of the job they do, .agriculture workers in developing countries may be laid off during the growing season. 2. Structural Unemployment: Structural unemployment could also results from persistent cyclical unemployment, that is, if the econom ...
CHAPTER OVERVIEW
... A. Definition: Inflation is a rising general level of prices (not all prices rise at the same rate, and some may fall). B. The main index used to measure inflation is the Consumer Price Index (CPI). 1. The CPI is found by taking the price of the most recent market basket in a particular year divided ...
... A. Definition: Inflation is a rising general level of prices (not all prices rise at the same rate, and some may fall). B. The main index used to measure inflation is the Consumer Price Index (CPI). 1. The CPI is found by taking the price of the most recent market basket in a particular year divided ...
AD and AS together - Wayne State College
... On the previous slide say we have a oil prices spike up high or some other widely used input has an increase in price. This input price rise can cause SRAS to shift left. We would then have inflation with reduced output. The reduced output would be recognized as a recession with more unemployment an ...
... On the previous slide say we have a oil prices spike up high or some other widely used input has an increase in price. This input price rise can cause SRAS to shift left. We would then have inflation with reduced output. The reduced output would be recognized as a recession with more unemployment an ...
The Potential for Gost-Push Inflation in Canada
... maximum wage bill, seems appropriate or believable for situations in which an institution exists whereby the union can divide the work among its members in a more or less equitable manner; that is for unions such as the building and trades and longshoring unions which operate on a hiring hall princi ...
... maximum wage bill, seems appropriate or believable for situations in which an institution exists whereby the union can divide the work among its members in a more or less equitable manner; that is for unions such as the building and trades and longshoring unions which operate on a hiring hall princi ...
Fiscal Policy - Wayne State College
... In the US the only way the federal government can go into deficit in a year is to borrow. It does this by issuing US government securities called bills, notes and bonds, depending on their maturity (when the government says they will pay back – you should check what is difference between bills, note ...
... In the US the only way the federal government can go into deficit in a year is to borrow. It does this by issuing US government securities called bills, notes and bonds, depending on their maturity (when the government says they will pay back – you should check what is difference between bills, note ...
GroupA - UCSB Economics
... ACF and PACF of the residuals. G/GDP: ARMA Model of Proportional Changes ...
... ACF and PACF of the residuals. G/GDP: ARMA Model of Proportional Changes ...
MBA 9 Managerial Eco..
... Consequences for the economy as a whole Lost output (real GDP) from people being out of work – the economy will be operating well within its production frontier Unemployment seen as an inefficient way of allocating resources – labour market failure? Some of the long-term unemployed may leave t ...
... Consequences for the economy as a whole Lost output (real GDP) from people being out of work – the economy will be operating well within its production frontier Unemployment seen as an inefficient way of allocating resources – labour market failure? Some of the long-term unemployed may leave t ...
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.