Asymmetric blade effect diagram

Classified in Economy

Written at on English with a size of 5.39 KB.

Which topic is studied in Macro?

ALL(Output growth, Unemployment,inflation)

Which is not a macroeconomic policy of governments

Stock prices

Equilibrium is defined as...

aggregate output equals consumption Minus investment

The saving/investment approach suggests that an economy is equilibrium When..


If S=-Co+(1-C1)(Y-T), the term (1-C1) is called the...

Marginal propensity to save

Which of the following indexes are used to measurre the overall price?

ALL of ABOVE (CPI,PPI,GDP deflator)

The equilibrium condition for the goods market is called the...

IS relation

A decrease in the real money supply, will shift th LM curve...

Upward and to the left

Lower real income... The deamnd for money and a lower price level... The Demand for money

decreases, increases

Liabilities of banks include

Demand deposits

And increase in real exchange rate, e, Leads to

Higher imports

An increase in government spending will...

Rightwards shifts in the IS curve

A monetary contraction will have the effects...

None of above

An increase in foreign demand leads to

Improvement in the trade balance

A reduction in government spending will cause

A leftward shift in the IS curve

Define the LM curve

The combinations of i and Y that Maintain equilibrium in financial markets

Define de IS curve

The combinations of i an Y that Maintain equilibrium in the goods market

Suposse the central bank decides to conduct an open market purchase of Bonds

The LM curve shifts down

How Central Banks Control The Supply Of Money

1. Print More Money

2. Set the Reserve Requirement

3. Influence Interest Rates

4. Engage In Open Market Operations

5. Introduce a Quantitative Easing Program

What is the liquidity trap? is the situation in which prevailing interest rates are low and savings rates are high, making monetary Policy ineffective. In a liquidity trap, consumers choose to avoid bonds and keep their Funds in savings because of the prevailing belief that interest rates will soon Rise.

J-Curve: A type of diagram where the curve falls at the Outset and eventually rises to a point higher than the starting point.The J-curve effect is most notable in both economics and private Equity funds; after a certain policy or investment Is made, an initial loss is followed by a significant gain.

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