I OWE U
The first consequence of increasing government borrowing.
What is an increase in the demand of loanable funds?
The first consequence of expansionary monetary policy.
What is inflation?
What is the graphic representation of unemployment and inflation?
What is the Phillips Curve?
Money market operations like the repurchase of bonds.
The second consequence of increasing government borrowing.
The increase in the interest rate.
The second consequence of expansionary monetary policy.
Increase in consumption and investment, because money is cheaper.
What is inflation considered in economics? (Hint: how it affects income and prices)
What is a tax?
If inflation expectation raise, the Phillips curve
What is up?
Lowering taxes increases
Disposable income.
The third consequence of increasing government borrowing, it is not guaranteed at all levels.
The crowding out of private investors.
Name 1 of the 2 indicators use to predict the Federal Funds rate.
Output gap and inflation rate of the previous period.
What are the two sources of inflation?
Increase in the cost of inputs (cost-push)
and
Increase in the demand (demand push)
What is the effect of inflation in the long run Phillips Curve?
None
Lowering taxes affects consumption by...
its impossible to tell because of the consumption and tax multipliers.
Examples of this happened in Argentina 2001 and Greece in 2012.
What is government debt default.
What monetary action became popular in the US since 2007? It has been in place in Europe since the late 1980´s.
What is inflation targeting?
What is the relationship between the Phillips Curve and inflation?
It explains the relationship between raising inflation and lowering unemployment and vice versa.
What does the long run Phillips curve represent?
Natural rate of unemployment
Increasing public spending may cause an increase in ..
crowding out private investors.
Social security savings is a curious case of this phenomena, since one part of the government make I Owe U notes to another part of the same government.
What are implicit liabilities?
What is the inflation target for Mexico?
3% plus or minus 1%.
That it is zero bound or the liquidity trap.
What is the equation of disposable income?
Y- T +t (income minus taxes plus transfers)