FNCE 101 Study Guide - Final Guide: Indium Phosphide, Arbitrage, Ikat
Document Summary
If im ca > 0, you"re a lender. Gnp = gdp + nfp + ut => nx = ca gnp + gdp. Y (output falls below economy"s potential), fed will inc ir (cid:0) dec (cid:0) ad dec; also er appreciates, hurts us. Accumulation of unwanted products increases im and leaves i unchanged. High required return on stock -> stocks will earn more -> stock prices decrease. Ad = c + g + i = y + i s. If i > s (cid:0) ad inc (cid:0) p inc (cid:0) inc and y inc. Shifters of as (inc: to the left) (higher output in sr and lr): Lr: p will increase and output won"t change i= e+ r+ 1. (inflation is too high) or y > Goods market crucially influences the rate of inflation: = p. If base>0 and currency in circulation increase, reserves will be constant.
