...the difference between Keynesians and monetarists over the effectiveness of fiscal and monetary policy in the IS-LM framework. Introduction In economics there are two main schools of thought; these schools differ in their belief of what policies are best suited to attain full employment in the economy. Keynesians tend to favour demand side policies and are more prone to intervene in the market and therefore prefer to use fiscal policy whilst monetarists believe adjustments in money supply is more appropriate in stabilising the market ,therefore preferring monetary policy. In this essay I will discuss the views of Keynesians and monetarists regarding the effectiveness of monetary and fiscal policies in controlling aggregate demand through the IS-LM framework. I will first provide a brief description of the curves explaining their formation and what they represent and then I will go on to examine monetary and fiscal policy within the IS-LM framework. Finally, I will examine the views of monetarist and Keynesians regarding the effectiveness of both policies in raising the level of national l income and also consider the extreme cases. IS-LM framework The IS-LM model was initially developed by John Hicks in 1937 but was made popular in 1949 by Hansen in order ‘to provide a framework for analyzing the factors determining the level of aggregate demand’. The IS-LM model is a short run model of the determination of output. It shows the unique combination of income and interest...
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...Questions to Lecture 7 – IS-LM model and Aggregate demand 1. Draw Keynesian cross as a comparison of planned and realized expenditures. What is the intercept of planned expenditure line? What is its slope? If government expenditures would be positive function of output, how would the Keynesian cross change? We will go over this on the review session – easier to explain than on paper. The intersect point represents the equilibrium output. Black line – planned expenditures Blue line – realized expenditures If government expenditures would be positive function of output the blue line would shift up. 2. What are the tools of fiscal policy? Fiscal policy has 3 tools: 1. Increase or decrease government expenditures 2. Cut or increase taxes 3. Increase or decrease transfer payments 3. Explain the mechanism of government expenditures multiplier – why is the effect on the output greater than initial increase in government expenditures? The government purchases multiplier is ∆Y/∆G Initially, the increase in G causes an equal increase in Y, so ∆Y=∆G, But with increasing Y will be increasing C(Y-T) →further ↑Y →further ↑C →further ↑Y So government purchases multiplier will be greater than 1, it is same principal like with Bank’s creation of money when lending out. 4. Explain the mechanism of tax...
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... 10. Multipliers (government purchases and tax multipliers), and the exact magnitude of change of output per change of government purchases and taxes 11. The money market and the LM curve (equilibrium condition, money demand function and derivation of the LM curve) 12. Monetary policy implications in the money market 13. The short-run equilibrium in the IS-LM framework 14. Fiscal and monetary policy implications in the IS-LM framework (you should know how policies affect the goods market, money market, and ultimately affects the IS-LM model through r and Y) 15. Interaction between monetary and fiscal policy (Fed’s response) 16. Explain the recent recession and weak recovery using the IS-LM framework 17. IS-LM and aggregate demand, how to derive AD using the IS-LM model 18. Fiscal and monetary policy implications on the AD curve 19. Short-run to long-run adjustments in the IS-LM model 20. The Mundell-Fleming model (IS*-LM* framework) 21. Equilibrium conditions in the goods and money market for a small open economy 22. Monetary and fiscal policy under float exchange rate regime 23. Monetary and fiscal policy under fixed exchange rate regime 24. Trade policy under float/fixed exchange rate regimes 25. The debate over the Euro: under what...
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...identified that a LMS could provide a number of potential advantages for our college, including the following: Improvement in the quality of learning outcomes, Improvement in customer service quality, Efficiencies and cost savings. The specific objectives of the project is as follows: To identify the particular benefits to learners and the college from such a system To prioritise functionality which will be of most benefit to the college and its learners. To identify implementation considerations which help ensure success. 1.3 What is a Learning Management System? Wikipedia defines a LMS as “a set of software tools designed to manage user learning interventions”. 1 SearchCIO define it as “a software application or Web-based technology used to plan, implement, and assess a specific learning process.”2 Typically, a Learning Management System is a computer based system which facilitates creation and delivery of content, communication between stakeholders in the training process, monitoring of student participation, and assessment of student performance. A learning management system may also provide students with the ability to use interactive features such as course resources, assignment resources, and discussion forums. Learning Management can also allow for a wide range of interactions including College-Learner, College-Tutor, Tutor-Student, Student-Student. 1.4 Methodology for Assignment I held two Focus Groups to review all aspect of LMS and prioritise functionality...
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...of output • The U.S. economy in the 1980s and 1990s • Anticipatory monetary policy • The policy mix during the German re-unification Changes from the Previous Edition: The material in this chapter has been updated, but its format is essentially the same. More emphasis is given to the economic expansion in the U.S. in the 1990s. Introduction to the Material: Chapter 11 uses the IS-LM model derived in Chapter 10 to show how monetary and fiscal policies can be used to dampen economic disturbances. The economic effects of various policy mixes are highlighted in discussions of actual events: the recession and recovery in the United States in the 1980s, the U.S. recession in 1990-91, the long economic expansion thereafter, and the policies enacted by Germany during the re-unification process in 1990-92. First, the Fed's conduct of monetary policy is discussed, with an explanation of how open market operations can be used to change nominal money supply. The effectiveness of monetary policy in changing the amount of output demanded depends on the steepness of the LM-curve. The transmission mechanism, that is, the process by which monetary policy changes affect the economy, occurs in several steps. First, a change in money supply leads portfolio holders to make adjustments in their asset holdings. As a result, asset prices and interest rates change. The change in interest rates subsequently affects intended spending and thus national income. Table 11-1 provides a...
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...and Monetarists over the Effectiveness of Fiscal and Monetary Policy in the Is-Lm Framework In: Business and Management Keynesians and Monetarists over the Effectiveness of Fiscal and Monetary Policy in the Is-Lm Framework Discuss the difference between Keynesians and monetarists over the effectiveness of fiscal and monetary policy in the IS-LM framework. Introduction In economics there are two main schools of thought; these schools differ in their belief of what policies are best suited to attain full employment in the economy. Keynesians tend to favour demand side policies and are more prone to intervene in the market and therefore prefer to use fiscal policy whilst monetarists believe adjustments in money supply is more appropriate in stabilising the market ,therefore preferring monetary policy. In this essay I will discuss the views of Keynesians and monetarists regarding the effectiveness of monetary and fiscal policies in controlling aggregate demand through the IS-LM framework. I will first provide a brief description of the curves explaining their formation and what they represent and then I will go on to examine monetary and fiscal policy within the IS-LM framework. Finally, I will examine the views of monetarist and Keynesians regarding the effectiveness of both policies in raising the level of national l income and also consider the extreme cases. IS-LM framework The IS-LM model was initially developed by John Hicks in 1937 but was made popular in 1949...
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...Patient Identification: Name: LM (Grandmother) Occupation: Stay at home Grandmother Date of birth: 06/15/48 Sex: Female Age: 66 Religion: Catholic Birthplace: Mexico Ethnicity/Race: Hispanic Past Medical History: Illness: States that she has been having hip, leg and knee pain on the left side. Occasionally, she has pain on the right side. At the moment she states 0/10 for pain. Other days she claims to have pain on the left side of the hip and lower extremity and rates it 8/10. History of illness: LM is a 66 year-old female. She has a history of Diabetes Type 2 since 1997, and high blood pressure. Recently she has been diagnosed with anemia during her last check up. She affirms taking medication for her Diabetes, hypertension,...
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...proactive team members more accurately to help achieve targets and objectives. 5. Shorter and more concise emails and letters to avoid information overload. 6. Less attention to factual data and think ‘outside the box’ so that long term visions of services are not overlooked. 7. Learn to challenge directives on occasions in support of what is best for the department and staff. | * Management by Wondering Around (MBWA) in both sites’ laboratories * Have regular tea-breaks and lunch with staff in staff tea room. * Attend Laboratory Staff Meeting and Educational Training 6 monthly * LMS personal coaching * Experience active discussion in PMB (Pathology Management Board) meetings * LMS personal coaching * Proactive in receiving feedback from peers and staff * Continual experience in staff appraisal * LMS seminar: Coaching for Managers * Continual experience in staff appraisal * LMS seminar: Coaching for Managers * Learning to give constructive feedback from my appraiser in my personal NHS appraisal * LMS personal coaching * Learning from line manager’s and other Specialty Directors’ emails and letters. * LMS personal...
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...Intermediate Macroeconomics 311 (Professor Gordon) First Mid-Term Examination Fall, 2006 YOUR NAME: Circle the T.A session you are attending: Michel Wednesday Costel Wednesday Michel Thursday Costel Thursday INSTRUCTIONS: 1. The exam lasts 1 hour. 2. The exam is worth 60 points in total: 30 points for the three analytical questions, and 30 points for the multiple choice. 3. Write your answers to Part A (the multiple choice section) in the blanks on page 1. You won’t get credit for circled answers in the multiple choice section. 4. Place all of your answers for part B in the spaces provided 5. Good Luck! PART A Answer multiple choice questions in the space provided below. USE CAPITAL LETTERS. 1. ____ 6. ____ 11. ____ 16. ____ 21. ____ 26. ____ 2. ____ 7. ____ 12. ___ 17. ____ 22. ___ 27. _ _ 3. ____ 8. ____ 13. ____ 18. ____ 23. ____ 28. __ _ 4. ____ 9. ____ 14. _ __ 19. ____ 24. ____ 29. ____ 5. ____ 10. ____ 15. ____ 20. ____ 25. ____ 30. __ _ 1) If real GDP for 2001 was $1000 billion and nominal GDP was $500, then: (a) the implicit GDP deflator for 2001 was 0.5 (b) the implicit GDP deflator for 2001 was 2 (c) the implicit GDP deflator for 2001 was 500 (d) the implicit GDP deflator for 2001 was -500 2) If real GDP in China is growing at a rate of 6.93% percent per year, how long will it take to double: (a) 1 year (b) 10 years (c) 100 years ...
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...the question paper. Insert the question paper inside the booklet. Non-programmable calculators are allowed. Dictionaries are not allowed. 1 1. [17 points] Consider a closed economy. Suppose that there is an increase in business confidence. a. Using the IS-LM framework and AD-AS model show graphically the impact of the above event on output, interest rates, unemployment rate, and price level in the short run. Assume that the economy starts at the natural level of output. Please label the initial equilibrium with the letter A, and the short run equilibrium with the letter B. b. If the Bank of Canada wants to restore full-employment output, will the Bank of Canada increase or decrease the nominal money supply? Using the IS-LM framework and AD-AS model show graphically the impact of the Bank of Canada’s immediate intervention to restore full-employment on output, interest rates, unemployment rate, and price level in the short run. Please label the equilibrium with the letter C. c. Now suppose that the Bank of Canada decides not to intervene. However, the Ministry of Finance wants to restore full-employment output. Will the Ministry of Finance increase or decrease government spending? Using the IS-LM framework and AD-AS model show graphically the impact of the Ministry of Finance’s immediate intervention to restore full-employment on equilibrium output, interest rates, unemployment rate, and price level in the...
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...Open Economy Macroeconomics: The IS-LM-BP Model When we open the economy to international transactions we have to take into account the effects of trade in goods and services (i.e. items in the current account) as well as trade in assets (i.e. items in the capital account). Opening the economy to international trade in goods and services means that we have to take into account the increased demand for our goods by foreigners (our exports), as well as the decreased demand for our goods that occurs because we purchase foreign goods (i.e. our imports). Total expenditures in an open economy are C + I + G + NX, where NX -- net exports -- is equal to the level of exports (X) less the level of imports (V). Thus, our exports (X) represent spending by foreigners on domestic goods so they increase the level of domestic output. Imports (V), on the other hand, represent spending by domestic residents on foreign goods, so they decrease the level of (domestic) production. To analyze the effect of exports and imports on the equilibrium level of output, it is important to understand the various factors which determine the levels of exports and imports. Exports represent foreign demand for our goods and services. Foreign purchases of goods and services depend, among other things, on foreign income levels (just as our purchases of goods and services depend on our income levels). We assume that foreign income levels are constant, thus, foreigners demand a constant amount of our goods. Whether foreigners...
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...Name: __________________________ Date: _____________ 1.|Explain the following concepts:IS shocks, LM shocks| 2.|Use the IS/LM-AD/AS model to illustrate graphically how expansionary fiscal and monetary policy can help stabilize the output when economy is in a recession. | 3.|Use the IS-LM model to derive the AD curve and to show how expansionary fiscal and monetary policy can shift the AD curve. | 4.|A decrease in government spending reduces output more in the Keynesian-cross model than in the IS-LM model. Explain why this is true.| 5.|Use the IS/LM-AD/AS model to graphically analyze short-run & long-run effects of a negative IS Shock.| 6.|Assume that an economy is characterized by the following equations:C = 100 + (2/3)(Y – T)|T = 600|G = 500|I = 800 – (50/3)r|Ms/P = Md/P = 0.5Y – 50r|a.|Write the numerical IS curve for the economy, expressing Y as a numerical function of G, T, and r.|b.|Write the numerical LM curve for this economy, expressing r as a function of Y and M/P. |c.|Solve for the equilibrium values of Y and r, assuming P = 1.0 and M = 1,200. How do they change when P = 2.0? Check by computing C, I, and G.|d.|Write the numerical aggregate demand curve for this economy, expressing Y as a function of G, T, and M/P.|| 7.|Assume the following model of the economy, with the price level fixed at 1.0:C = 0.8(Y – T)|T = 1,000|I = 800 – 20r |G = 1,000|Y = C + I + G |Ms/P = Md/P = 0.4Y – 40r|Ms = 1,200||a.|Write a numerical formula for the...
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...assignment we utilized Brute Force NT LAN Manager (NTUM) and LAN Manager (LM) and Dictionary NTLM and LM hashes. (Features overview, n.d.) Brute Force is a password cracking -technique that tries every combination of numeric, alphanumeric, and special characters until the password is broken or the user is locked out. Dictionary is a technique that runs a given password against each of the words in a dictionary (file of words) until a match is found or the end of the dictionary is reached. (p. 13) Cain and Abel couples Brute Force and Dictionary with LM and NTLM hash. Based on my lab experience, my assessment is that the Dictionary NTLM Manager is the better of the processes. The table below reveals that Dictionary NTLM delivered more favorable results over LM because this process uncovered the passwords in the shortest amount of time and recovered the passwords in their entirety. Table | Brute Force LM | Brute Force NTLM | Dictionary LM | Dictionary NTLM | User1 | No password, 6-8 hours | No password, estimated time 10 years | yes, 75 seconds | yes, 40 | User2 | No password, 6-8 hours | No password, estimated time 10 years | yes, 30 | yes, 25 | User3 | No password, 6-8 hours | No password, estimated time 10 years | no, 180 | no, 75 | 2) Compare and contrast the results from the two methods used to crack the accounts for the three passwords each encrypted by the two hash algorithms. What conclusions can you make after using these two methods? Using the...
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...Market Perspective Trends and Timing Transformations in Lighting 2008 DOE Solid-State Lighting R&D Workshop January 29, 2008 Vrinda Bhandarkar Strategies Unlimited 1 Outline Introduction Markets Lighting Outlook 2 HB LED Market Analysis Market is worldwide in scope -Main production and consumption are in US, Europe, Japan, Taiwan, S. Korea, China, SE Asia Market analyzed in terms of packaged devices (lamps, SMDs, multichip, high-power packages) Materials include InGaAlP (red-orange-yellow) and InGaN (blue, blue-green, green, white) -Higher performance, “qualified” devices Market segmented and sub-segmented by applications that have similar functionality 3 HB LED Application Segments Other Illumination Indicators, small displays amusement, misc. other Mobile Appliances HB LED Market Signals Automotive Signs and Displays 4 Outline Introduction Markets Applications Lighting Outlook 5 HB LED Market Trends Market continued its “slow growth” phase in 2006 – similar patterns to 2005 Overall market growth was 6% to $4.2 billion Heavily influenced by ongoing decline in mobile phone market Other applications continued to have attractive growth rates Substantial ASP erosion across many product types 6 Recent Market History 5,000 Market Size 3,000 ($ Million) 4,000 44%/yr 6.2%/yr Other Illumination Signals Automotive Signs/Displays Mobile Appliances 2,000 1,000 0 2001 2002 2003 2004 2005 2006 7 Market...
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...we know that a monetary expension leads to higher level of real GDP and higher price level.In this case, the endogenous veriable Y increases its value, from Y to Y1. The price level also goes up from P to P1, as shown in the AS-AD model under, in which the aggregate demand (rapresented by the AD curve) reaches a higher level. In the LM-IS model a monetary expansion policy makes the LM curve move rightward, from LM to LM1, which means a lowering in the interest rate and an increase of real GDP, from Y to Y1, in the short run. 2a) ε=0,5 M0=1Ɵ*1*H M1=1Ɵ*0,5*H If the banking sector is not efficient the money supply decreases from M0 to M1, whose amount after the crisis is half of the the one before. Referring to AS-AD model, the aggregate demand curve moves rightward, but less than in the case without any crisis (ε=1), and the same happens to the LM curve. There will be an increase in Y and P, a decrease in i but all these changes will be smaller than in the other case. What has been described above is the short term effect. In the medium run there will be an adjustment that leads the LM curve back to its previous position. 2b) The ECB has two tools to counteract the effect of a decrease in efficiency of commercial banking sector. It can change the minimum reserve requirements (mrr) or the the monetary base. In the first case, with ε=0,5, ECB can cut the mrr of half, as it comes from 1xƟ*ε2*H=1Ɵ*ε*H => x=12. ...
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