BUS G345

BUS G345 - currency in the country of origin (e.g. USD)...

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Evidence from business cycle fluctuations in the US indicates that recessions have been preceded by a decline in the growth rate of money. US national debt reflects all the accumulated federal budget deficits and surpluses from George Washington to George W. Bush The price level and the money supply generally move closely together. The data seem to indicate that a continuing increase in MS might be an important factor in causing the continuing increase in the price level that we call inflation The recession of 1981 – 82 (7/1891 – 11/1982) was 16 months in duration and occurred due to a strict monetary tightening engineered by the Fed with the goal of attacking double digit rates of inflation and inflationary expectations The foreign exchange market : is where the currency of one country is converted into the currency of another country – for funds to be transferred from one country to another, they have to be converted from the
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Unformatted text preview: currency in the country of origin (e.g. USD) into the currency of the country they are going to (e.g. Euro). The foreign exchange market is where this conversion takes place, so it is instrumental in moving funds between countries The foreign exchange rate: is the price of one countrys currency in terms of another countrys currency A strong USD means: that U.S goods exported abroad will cost more in foreign countries and foreign goods imported will cost less in U.S Who benefits and who is hurt when interest rate rise ? Corporations with immediate capital construction needs worse off Households with little debt, saving a significant fraction of annual income for retirement better Fed running persistent budget deficits worse off Black market operating on cash only basis worse off...
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This note was uploaded on 12/12/2011 for the course BUS 345 taught by Professor Reiben during the Spring '11 term at Indiana.

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