b. shortage of loanable funds and the interest rate will fall. c. surplus of loanable funds and the interest rate will rise. d. shortage of loanable funds and the interest rate will rise. 3. Suppose that the nominal interest rate was 3 percent and the inflation rate was 1 percent.
| |(Colander, D. C. (2010). Macroeconomics (8th ed.). Boston, MA: McGraw Hill/Irwin) | |Inflation: Prices of items and services is rising, while purchasing power is in a decline. Inflation is a continual rise the price level. | |(Colander, D. C. (2010).
Factors That Affect Interest Rates: 1. Impact of economic growth on interest rates: Economic growth puts upward pressure on interest rates by shifting demand for loanable funds outward. Economic slowdown puts downward pressure on the equilibrium interest rates by shifting demand for loanable funds inward. (Exhibits 2.8 &
The largest expenditure component of GDP is: ▪ Government spending ▪ Net exports ▪ Investment ▪ Consumption Download Complete Answers ECO 372 Complete Class 19. Which of the following is the path through which contractionary monetary policy works? ▪ Money down implies interest rate up implies investment up implies income down. ▪ Money down implies interest rate down implies investment down implies income down. ▪ Money down implies interest rate up implies investment down implies income down.
358). When the economy is in the long run, is reached equilibrium at the point where aggregate demand curve intersects the long run aggregate supply curve. Also there are higher overall prices and unemployment levels, should government policy over money wages not allow for falling wages, then an unemployment gap exists which will extend higher unemployment rates. (O’Sullivan, Sheffrin & Perez 2010 p
C. the nation's stock of capital is growing. D. the nation's stock of capital is declining. E. the nation's GDP will rise. Supply-side economics stresses: A. an "easy" money policy. B. the stimulation of incentives to work, save, invest, and undertake entrepreneurial risk.
The business cycle is a series of cycles that define the economies and a business’s stages of expansion and contraction. The first stage of the business cycle is the Boom stage, this is where there is high level of customers spending, there are high levels of business confidence, and an increase of profits & investment. Unemployment is also low as the business creates jobs. The next stage is the Recession stage, this is where the high levels of customer spending start to decrease and business confidence means that lower profits and the business will have to start cutting back on investments which starts to increase unemployment as the business is forced to cut back on resources. The next stage is Depression, this is where there is a lengthy period of declining Gross Domestic Product (GDP) – this is where there is little to no customer spending (there is some increase in the rise of employment).
Answer: D Diff: 1 Topic: Definition of Economics 3) Which of the following is a microeconomic topic? A) the reasons why a consumer buys less honey B) the reasons why the average price level in a country falls C) the cause of increasing unemployment D) the effect of the government budget deficit on inflation E) the reasons why the labour force in a country decreases Answer: A Diff: 1 Topic: Definition of Economics 4) The study of how wages are set for New Brunswick teachers is classified as A) a macroeconomic topic. B) a microeconomic topic. C) economics of social interest. D) economics of private interest.
Issues of definition and measurement 4 3.1 GDP 4 3.2 GNH 4 3.3 HDI 5 3.4 Alternative methods 5 4. Conclusion 7 5. References 8 1. Introduction This report provides an overview of different scientific perspectives and their particular types of measurement concerning economic growth and happiness. Economic growth involves the rise of output in an economy by using gross domestic product (GDP) to measure ‘the total value of everything produced in an economy in a time period (…)’ (Fribbance, 2009, p. 21) Research on happiness outlines the limitations and complexity of people´s well-being on a global basis.
In reality, trade and financial policies implemented since 1944 and economic situation of other countries moved Iceland economy into recession in late 80s until mid 1990s. Implementation of series of strategies to liberalize economy and state-owned companies in 1994 to 2006 increased cost-of-living and public expenditure, with wage growth outpacing productivity. This contributes to the following issues: • Increasing inequality in income distribution; • Economic growth which is incompatible with the country’s environmental values; • Household debts that has risen from 80% in 1990 to 192% in 2004; • Dramatic increase of value of asset prices (including real estate) and pension-fund holdings; • The question of sustainability of current