Banking and Monetary Policy_Butkiewicz_Date__042710

Banking and Monetary Policy_Butkiewicz_Date__042710 -...

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Chapter 12 continued 69: accommodating supply shock (concern: don’t want output to fall) 71: output/unemployment constant but increase inflation 72: don’t accommodate supply shock (concern: decrease inflation) - Lower output/unemployment but constant inflation because raise interest rate - Basically supply shock is when producers in position to increase price of stock because short run demand was price inelastic (increase total revenue) change in quantity demanded is less than change in price o Elastic: decrease in total revenue o Unitary elastic: same total revenue 75: Time dimension: - Actual inflation today= expected inflation next year - Decrease inflation temporary recession - Disinflation= prices rising but rate of inflation is going down 84: accommodative policy: permanent increase inflation (until something else’s happens) 89: recession over in terms of MBER because output is no longer declining 93: lick and policy (monetary) 94: real variables—real output, real unemployment etc. 95:
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This note was uploaded on 08/29/2010 for the course ECON 302 taught by Professor Abrams during the Spring '08 term at University of Delaware.

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Banking and Monetary Policy_Butkiewicz_Date__042710 -...

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