Treasury Note

In late June the Fed lowered its federal funds rate target from 1.25% to 1%. However between mid June and early August the yield on longer term 10 year Treasury notes rose from 3.1% to over 4.3%. This shows that Federal Reserve activity is irrelevant to the behavior of long term interest rates" Agree or Disagree with the u ...continues

Exchange Rate Calculations

Suppose the CFO of a German corporation with surplus cash flow has 1million Euros to invest. Suppose that interest rates on 1-year CD deposits in US banks are 2%, while rates on 1 year CD deposits denominated in euros in German banks are currently 4.5%. Suppose further that the CFO expects that the (euro/$) exchange rate will i ...continues

Fed and reduction in interest rates

Since January of 2001 the Fed has reduced its Fed funds rate target from 6.5% to 1%. Nonetheless, the number of people at work is less than (and the unemployment rate higher than) when the Fed embarked on this expansionary monetary policy. Why hasn't the Fed's policy been more effective over the last 2.5 years in restoring stro ...continues

Changes in demand: baby diapers and retirement villages

Other things equal, an increase in the number of buyers for a product or service will increase demand. Baby diapers and retirement villages are two products designed for different population groups. The U.S. Census Bureau website www.census.gov/ipc/www/idbpyr.html, provides population pyramids graphs that show the distribution ...continues

Personal distribution of income--what is the trend?

Visit the U.S. Census Bureau website at www.census.vov/hhes/income/midclass/index.html and select Data Highlights. Since 1969, how has the share of aggregate household income received by the lowest and highest income income quintiles (fifths) changes. Make a summary and sound conclusion.

Demand deposit multiplier and reserve ratio

When banks have no excess reserves, the reserve ratio is 0.1 and the demand deposit multiplier is 10. This means that the banks required reserve is 10% of their deposits. However, what is the multiplier when including both the excess and required reserves? For part (b) you would use the multiplier that you have obtained i ...continues

Real interest ate, CPI and Nominal Interest rates

Please see the attached files.

Total change in GDP

Please see the attached file.

The Doba Round--what is the current status?

Determine and in details summarize the current status of the Doha Round of trade negotiations by accessing the World Trad Organization site www.wto.org. Is the round still in progress or has it been concluded with an agreement? If the former, when and where was the latest ministerial meeting? If the latter, what are the main fe ...continues

Aggregate supply and demand

"The idea of the Fed having to choose between hawk and dove policies after an adverse supply shock is plain silly. All the Fed has to do is shift the curve back to its original position, which would prevent both recession and inflation. Do you agree? Why or why not?