ECON 105 Lecture Notes - Lecture 6: Dihydrolipoyl Transacetylase, Underemployment, Deflation

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harlequinjackal102

21 May 2013

School

Simon Fraser University

Department

Economics

Course

ECON 105

Professor

Eldar Sehic

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ECON 105 Full Course Notes

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Changing ms is most effective in changing y when md is steep (when money and bonds are not easily substituted) and when id is flat (when firms are very sensitive to i) Expectation inflation: when people expect inflation and ask for higher wages (fp ) which moves as left. Total inflation = demand inflation + supply inflation + expectation inflation. Suppose due to some positive shock economy is in an inflationary gap at yhigh. Natural reaction is for fp which moves as left. If central wants to validate the initial shock, it uses emp, which moves ad right. Able population (ap: those willing to work are in labour force (lf, those working are employed, those not working are unemployed (un, those not willing to work are not in labour force (nlf) Total not working (n) = nlf + un. Underemployment (hiring two people instead of one for the same amount of.

Related Questions

1. For a fiscal policy to be most effective, we must have

a. perfectly flexible wages and prices.

b. a vertical AS curve.

c. accurate information about the state of the economy.

d. a balanced government budget in each year.

e. a high marginal propensity to save.

2. Which of the following will make crowding out caused by government borrowing more severe?

a. A steep (inelastic) investment demand curve

b. A global credit market

c. Tax increases

d. A steep (inelastic) supply curve in the loanable funds market

e. None of the above

3. Government spending policies can be developed to work against the problems of unemployment and inflation because government spending can

a. decrease aggregate demand to combat unemployment and increase aggregate demand to combat inflation.

b. increase aggregate supply to combat unemployment and decrease aggregate demand to combat inflation.

c. increase aggregate supply to combat unemployment and decrease aggregate supply to combat inflation.

d. increase aggregate demand to combat unemployment and increase aggregate demand to combat inflation.

e. increase aggregate demand to combat unemployment and decrease aggregate demand to combat inflation.

goldbeetle120

Below is an IS-LM Model:
C = 250 + 0.20Yd
I = 150 + 0.20Y – 1000r
G = 250
T = 250
(M / P) d = 2Y – 8000r
(M / P) s = 1600
a) Derive the IS and LM relations
b) Find the equilibrium level of income (Y) and interest rate (r).
c) Find the values of Consumption and Investment in equilibrium.
d) Suppose there is an expansionary monetary policy and money supply( (M / P)s increases to 1840. Find the effect of this on equilibrium levels of income (Y), interest rate (r), consumption, and investment.

carminesnail415

Consider the Following Economy:

Y = (C + I + G + NX) <-Income Identity

C = 300*0.8YD<-Consumption

I = 200-1500r <-investment

NX = 100-0.04Y-500r <-net exports

M^d = (0.5Y-2000r) <-Money Demand

G = 1200

t (tax rate) = 0.2

Money Supply (M^s) = $550

P = $1

a. What is the IS Curve?

b. What is the LM Curve?

c. What are the values of Y (income) and interest rate (r) when the IS-LM model is in equilibrium?

ECON 105 Lecture Notes - Lecture 6: Dihydrolipoyl Transacetylase, Underemployment, Deflation

ECON 105 Full Course Notes

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