If the current exchange rate is US$1 equals 1.25 Euros, how much did you win in US dollars? Suppose that the interest rate in Irish banks is 5% for a one year CD. In the USA, the rate is 2% for a one year CD. If you left your winnings in Ireland, how many Euros would you have in a year? If you had taken your winnings back to
Traditional means of controlling inflation have to be used carefully as they can have unintended consequences. Interest rate increases negatively impact stock markets. At the same time, inflation must be kept within target limits, three per cent or less. Can alternatives to traditional monetarist devices be identified in mo
When Oil goes up, what is affected in the American economy and how? very briefly explain what happens (if anything) to each and why Consumption Investment Government Spending Imports Exports National Income Aggregate Supply Aggregate Demand Inflation Exchange Rates Interest Rates
Which is worse inflation or unemployment?
Explain how cost-push inflation might prompt policymakers to take actions that subsequently cause demand-pull inflation. Explain how this demand-pull inflation could lead to another round of cost-push inflation. Illustrate this process graphically using the aggregate demand-aggregate supply model.
Compare the various economic data, such as unemployment, Gross Domestic Product, Population, GDP per Capita, inflation ect between Belgium and Spain. What is the correlation among all of these, and the level of unemployment and spending therefore GDP. This does affect the economy of a country as well as the individual that
Do the following events cause the dollar to appreciate or depreciate against the Euro? 1. Health experts discover that red wine, espacially French or Italian red wine, lowers cholesterol. 2. GDP falls in nations across Europe. 3. The United States experiences a higher inflation rate than does Europe. 4. The United States
Finance example with regard to retirement and investment portfolios Background for Problem: Old Alfred Road, who is well known to drivers on the Maine Turnpike, has reached his seventieth birthday and is ready to retire. Mr. Road has no formal training in finance but has saved his money and invested carefully. Mr. Road own
As I understand it, real wages do increase over time , as an economy grows and productivity increases. If this is the case , why can we not all afford to buy very expensive goods / services in 50 , or 100 years time ? It can not be because of inflation as by definition real wages have factored inflation in.
A Church wants to purchase a GMC Van for $12,000 in Year 0. It will provide income of $6000 real dollars (R$) every year for Years 1 and 2. At the end of Year 2, it will be sold at a market value of $3500 real dollars (R$ in Yr 0 dollars). Also, ? The GMC Van is depreciated by the straight-line method with a depreciable life
I am wondering, what is the general assessment of the US economy over the next year or two in tems of Real GDP growth and inflation....ignoring business cycle effects...just in tems of current conditions regarding the aggregate supply (AS) and aggregate demand (AD) sides of the US economy and their COMBINED EFFECT on Real GDP Gr
At what price /gas ($/gal) will the life time cost of these 2 vehicles be the same with a MARR of 5%? Ignore inflation and keep all other O&M cost the same. Civic Hybrid Honda Insight ---------------------------------------------------------------------------
Here is a Consumer Price Index and the average annual price of gas for 10 yrs interval. 1990 2000 ---------------------------------------------------------------- CPI 120.7 152.3 Price of Gas (A$) 0.99 1.40 What is the Real p
Please help answering the following problems. 1) An economist has predicted that for the next five years, USA will have an 8% annual inflation rate, followed by five years at 6% inflation rate.This is equivalent to what average price. This is equivalent to what average price change per year for the entire ten year period?
Macro - inflation, M2 money supply - multiplier, purchasing power of parity, FX.
2. A 1991 The Wall Street Journal cover page article entitled "Foreign Rate Increases May Worsen Slump" explained how the German central bank raised domestic interest rates in order to reduce inflation below the 3% level. At the same time, the U.S. central bank reduced domestic interest rates to fight the deepening recession in
2. England has not joined the European Monetary Union, but it is a member of the European Union. As a result, England has a flexible exchange rate and retains its own currency, the pound sterling. Suppose England's unemployment rate began to rise and the government passed an investment tax credit to help stimulate the economy.
Question Suppose the interest rate on a domestic debt instrument is 10% and the expected rate of inflation is 5%. Further, suppose that the foreign nominal rate on a similar instrument is 6% and expected foreign inflation rate is 4%. Based upon the real interest rates what is your forecast of the future value of the domestic
As an employee of the World Bank you have been asked to research the needs of a country with a particular economic concern. For this assignment select a country and economic concern, such as population, unemployment, etc. Use the and Internet for data sets for the concern that you have chosen. Select a second country and
Is it possible to obtain the inflation rate, growth rate of money,and growth rate of nominal GDP with only the following information? Constant velocity of circulation real GDP growing at 3% real interest rate growing at 2% nominal interest rate at 7%.
For the coming year, inflation in Brazil is expected to be 15% while the US inflation is expected to be 3%. Spot Brazil Real is 2.86BRL/USD. Based on relative PPP, what would you expect BRL/USD to do and by how much in one year?
Please answer using a yaer 1 macro Canadian perspective in your reply see attachment Please expand on the following (if correct): Answer: Increase in the output, employment will increase the government revenues due to the increase in taxes collected on profits, industrial production, and salaries. Inflation might not ha
Please see attachment Explain appropiate graphs (Basic) as indicated.
A. Suppose that the Fed Reserve adopts an inflation targe of 3% for its monetary policy. If the long run growth rate of real GDP(Y) is 2%, then at what rate would the quantity of money (or money supply) have to grow to meet this inflation target? b. In the short run, why might the Federal Reserve miss their inflation targe
If the nominal rate of interest is 12 percent and the rate of inflation is 8 percent, the real rate of interest is: 4 percent 20 percent 8 percent minus 4 percent indeterminate
To study the relationship between capacity utilization in manufacturing and inflation in the united states, Thomas Gittings obtained the following regression results based on the annual data from 1971-1988: ^ Y(sub(t))= -70.85 + .8880X(sub (t)) t= (-5.89) (5.90) r^2= 0.685 where Y= changes in inflation as mea
Previous Part to this: The Spot Exchange Rate (R) between the British Pound and the Japanese Yen is Y=190.00/L The six month forward rate (F) is Y=199.0476/L British six month government bonds offer an interest rate of five percent Spot Rate (R) is Y184.3/L Forward Rate (F) is Y199.0476 British 6 month government bonds
1. The fundamental explanation of why commercial banks can create money lies in: A)fractional reserves. B)The Federal Reserve or other central banks. C)Private ownership. D)The consumption function. E)Maintaining a marginal propensity to consume less than 1. 2. A reduction in reserve requirements of member banks
As a result of a recession consumer expectations of annual inflation declined from 2% to 1.5% and, at the same time, the expected real rate of return required to equate investor demand to the existing supply of default risk- free Treasury bonds declined from 3% to 1%. Draw a supply/demand diagram of the US Treasury bond ma
I am not clear how can the government benefit from money creation...can you explain? Also,what accounts for the relatively high unemployment rate of young workers? Why does the minimum wage seem to have the greatest impact on teenagers? Who does the minimum wage benefit? Lastly, when prices continue to rise year after year