This chapter explores the effect of the nonlinearities induced by the inflation threshold on the role of government expenditure in transmitting inflation shocks to GDP growth. Evidence shows that at all levels of inflation below 6 per cent government expenditure play a positive role in propagating ...
True or false: Nominal GDP may increase even if real GDP falls. A country is said to have an open economy if a significant percentage of GDP is exported and a significant part of domestic spending is on imported goods and services...
Relationship between inflation, interest rates, and stock markets Inflation up to a certain level is generally considered good for Gross Domestic Product (GDP) growth, because it can boost consumer spending, investment returns, job growth and corporate earnings, among other things. Since the 2008 Gl...
quarter. If the BEA reports a positive GDP number, the economy grew over the previous quarter. The rate of GDP increase gives an indication how fast the economy is growing. When the quarterly GDP results are released, the BEA can also make revisions to the growth rates for previous quarters...
A recent estimate by the Centre for Strategic and International Studies (CSIS), puts the annual global cost of digital crime and intellectual-property theft at $445 billion – a sum roughly equivalent to the GDP of a smallish rich European country such as Austria. (8)To add to the ...
Explain why an increase in the K/L ratio would tend to increase GDP per capita. Explain why an increase in nominal GDP does not necessarily imply that economic growth has taken place. Define GDP per capita, adjust inflation and the growth rate of GDP...
GDP is divided by population to determine personal income, adjusted for inflation with real GDP, and adjusted forpurchasing power parityto control for the impacts of regional price disparities. Real per capita GDP adjusted for purchasing power parity is a heavily refined statistic used to measure tr...
If wages increase with inflation, and if the borrower already owed money before the inflation occurred, inflation benefits the borrower. This is because the borrower still owes the same amount of money, but now they have more money in their paycheck to pay off the debt. This results in less...
When the Federal Reserve increases the money supply, inflation may occur. More often than not, if the Fed is attempting to stimulate the economy by growing the money supply, prices will increase, the cost of goods will be unstable, and inflation will likely occur....
Inflation targets are used by central banks to employ monetary policy, such as setting interest rates. TheTaylor Ruleis aneconometricmodel that says that a central bank should raise interest rates when inflation or gross domestic product (GDP) growth rates are higher than desired, and vice versa....