Budget Deficits and Economic Growth Joey Willoughby ECO 203 Principles of Macroeconomics Instructor: Nathan Rondeau 6/27/2011 Budget Deficits and Economic Growth Economists generally agree that high budget deficits today will result in the reduction of the growth rate of the economy in the future. The United States budgetary situation has disintegrated significantly since 2001‚ when the CBO ( Congressional Budget Office
Premium United States public debt Deficit Public finance
c. Southwest Airlines – Oligopoly d. large farm whose major crop is corn – Oligopoly e. Google – Monopolistic competition Q2. (a) How does the government measure the nation’s unemployment rate? The Government uses monetary and fiscal policy to fight unemployment‚ increase spending‚ and
Premium Monetary policy Unemployment Inflation
Economics Report Section 1: Analyse the recent trends in Australia’s major economic objectives. (Economic growth‚ inflation‚ unemployment‚ the exchange rate‚ environmental sustainability and distribution of income) Economic growth - Economic growth occurs when there is a sustained increase in a country’s productive capacity over time. This is generally measured by the percentage increase in real gross domestic problem. The target for economic growth set by the government is around 3-4%
Premium Inflation Macroeconomics Monetary policy
board system‚ which requires both the stock and flow of the monetary base to be fully backed by foreign reserves. It is the exchange rate system implemented in Hong Kong to stabilize the exchange rate between the Hong Kong dollar (HKD) and the United States dollar (USD). This means that any change in the monetary base is fully matched by a corresponding change in foreign reserves at a fixed exchange rate. (1)(2) The Hong Kong Monetary Authority (HKMA) is Hong Kong ’s currency board and central
Premium Monetary policy Currency Bretton Woods system
Introduction To Money Market Content: * Introduction * Meaning * Definitions | INTRODUCTION: The money market is a key component of the financial system as it is the fulcrum of monetary operations conducted by the central bank in its pursuit of monetary policy objectives. It is a market for short-term funds with maturity ranging from overnight to one year and includes financial instruments that are deemed to be close substitutes of money. The money market performs three
Premium Monetary policy Central bank
As a result‚ the traditional policy responses within this school of thought no longer sought to alleviate the economic problems. Consequently‚ this resulted in the New-Keynesian framework which forms the current mainstream thought in macroeconomics. Ultimately‚ New-Keynesian aims to
Premium Inflation Monetary policy Economics
usually implements certain government policies. OBJECTIVES OF CENTRAL BANK OF KENYA i. To formulate and implement monetary policy directed to achieving and maintaining stability in the general level of prices. ii. The Bank fosters the liquidity‚ solvency and proper functions of a stable market based financial system. iii. Support the economic policy of the government including its objectives for growth and employment. iv. Formulate and implement foreign exchange policy v. Hold and manage its foreign exchange
Premium Monetary policy Central bank Inflation
allowed to fluctuate within limits one percent above and below the fixed central rate. It is the role of the nation’s monetary authority to maintain the fixed parity using either direct or indirect intervention. Direct intervention involves buying and selling the currency in the foreign exchange market‚ whereas indirect intervention involves the aggressive use of interest rate policy‚ foreign trade regulation or the intervention by other public institutions. b. Advantages and disadvantages of fixed
Premium Monetary policy Foreign exchange market Bretton Woods system
* The Multiplier Effect is an increase in aggregate demand. For any given increase in spending that is not directly caused by an increase in come‚ the impact on equilibrium GDP is greater than the initial spending increase. * Fiscal policy includes government taxation and expenditures * When governments increase spending‚ the increase ripples through the economy. * A decrease in
Free Monetary policy Inflation Economics
THE CONCEPT OF THE TERM STRUCTURE OF INTEREST? WHAT INFLUENCE DOES THE BANK OF ENGLAND HAVE OVER THE TERM STRUCTURE AND WHY IS IT IMPORTANT FOR MONETARY POLICY To understand the term structure of interest rate we need to elaborate how interest rates function and how they are determined. Interest rates are a vital tool to all the macro-economic policy objectives of a government such as control of inflation‚ investment as well as employment. Interest rates refer to the price paid by deficit agents
Premium Monetary policy Inflation Central bank