ECON 219 Lecture Notes - Lecture 14: Monetary Policy, Foreign Exchange Market, Public Float
aaronho0217 and 40067 others unlocked
10
ECON 219 Full Course Notes
Verified Note
10 documents
Document Summary
Equilibrium of aa and dd schedule = 3 markets simultaneously. If bank of canada raises the interest rate the output level (national income level) goes down in the. For the expansionary monetary policy: dd to the right. Depreciation of the domestic currency increase in the national income: export more competitive in the world market increase our export. Imports become more expensive for the domestic country, compare to the domestic product reduce the imported products: positive impact on the ca. Ce(cid:374)tral (cid:271)a(cid:374)k"s goals: depe(cid:374)ds o(cid:374) the (cid:272)ou(cid:374)tr(cid:455) a(cid:374)d all (cid:894)(cid:455)ou (cid:272)a(cid:374)"t ha(cid:448)e it all(cid:895: price stability, full employment, economic growth, stability of the financial market, stability in the foreign exchange market. The ba(cid:374)k of ca(cid:374)ada"s (cid:373)ai(cid:374) goal is to keep the i(cid:374)flatio(cid:374) lo(cid:449), sta(cid:271)le a(cid:374)d predictable: this is why we have the floating regime. The fed operates under a dual mandate: price stability, long run growth. The european central bank: located in germany, frankfort, price stability is the primary, lr goal.