Money demand indicates the consumer's quantity demanded for money. In macroeconomics, there is often a distinction made between nominal money demand and real money demand.Answer and Explanation: Real money is the quantity of goods and services a nominal stock of money can purchase. Nominal stock ...
Macroeconomics is the portion of economics that focuses on large-scale or general economic factors, such as production, employment levels, and inflation. Answer and Explanation:1 One aspect that is looked at in macroeconomics is the unemployment rate, which is the portion of the labor force that...
The prime rate is a type ofinterest ratethat is set by banks and lenders as a baseline for what APR they want to charge. We’ll unpack this in more detail below. First, it’s important to understand the larger picture. When the Federal Reserve (the Fed) observes the macroeconomics of ...
Giannone, D., L. Reichlin, and L. Sala. 2004. Monetary Policy in Real Time. InNBER Macroeconomics Annual, ed. M. Gertler and K. Rogoff, 161–200. MIT Press. Google Scholar Giannone, D., L. Reichlin, and D. Small. 2008. Nowcasting: The real-time informational content of macroeco...
face value of $5,000 and an 8%coupon ratethat pays interest every year, will return the bondholder $5,000 x 8% = $400 annually for 25 years. If we subtract inflation from the nominal interest rate, we derive the real interest rate, which is the rate that the deposits are calculated...
Demand is said to be "perfectly inelastic" if the demand for that product will remain consistent, regardless of any price changes. Perfectly inelastic demand occurs rarely in the real world. Close examples might include rare medicines, or fresh water in a time of drought: regardless of any pri...
Today, the value of money (not just the dollar, but most currencies) is decided purely by itspurchasing power, as dictated by inflation. That is why simply printing new money will not create wealth for a country. Money is created by a kind of a perpetual interaction between real, tangible...
Two extreme, definitive, answers to the question posed in the title and one more murky and incomplete can be contemplated. The first holds that we have learned nothing from the Real Business Cycle (RBC) programme on the subject of frictions simply becaus
Productivity measures the amount of value created for each hour that is worked in a society. Three gear wheels in contact You probably knowthat the amount of work you can get done in one day is your rate of productivity. Productivity in economics is pretty much the same as productivity at ...
There aremany examples of aggregation in macroeconomics, so answers will vary widely. Oneexample would be the interest rate鈥攐btained by combining all the different interest ratesin the economy into a single aggregate. Another example is gross domestic product(GDP)鈥攐btained by combining all ...