Essays on Macroeconomics Page 2

1. Assume an economy that imports intermediate inputs and pursues a fixed exchange rate system is hit by capital flight. Carefully describe the immediate impact of capital flight on bond prices and the share price of a firm that has dollarized liabilities and cash-flows that are denominated in domestic currency. A fixed exchange rate is…

Introduction             The current recession was brought about by several factors although the collapsing of the mortgage industry is viewed as having accelerated the current economic down turn being felt all over the globe. Thee are some who feel that the problem originates from sub-prime lending a notion supported by the collapse of Fannie Mae…

Economics is divided into two main branches: microeconomics and macroeconomics. Macro means large, and micro means small. Microeconomics takes a close-up view of the economy by concentrating on the choices made by individual participants in the economy such as consumers, workers, business managers and investors. Microeconomics stresses on the role of prices in business and…

What kinds of Monetary policy(easy or tight)  should be exercised under the recessionary gap? Give examples of policy tools in terms of RRR(Required Reserve Ratio), DR(Discount rate) and OMP(open market policy). During a recessionary gap, the Federal Reserve must stimulate economic growth. To stimulate economic growth, the Federal Reserve must buy bonds through the open…

Question: What is the role of menu costs in New Keynesian models? Is the importance placed on menu costs in these models justified by the empirical evidence? Most economists believe that short-run fluctuations in output and employment represent deviations from the economy’s natural rate. They think these deviations occur because nominal wages and prices are…

Iincreased at an annual rate of 4 percent according to preliminary estimates, following a modest increase of 1 1/2 percent inthe third quarter. The two quarters taken together reflect slowereconomic growth in the second half of 1984 than in the first half (table1). GNP prices, as measured by the fixed-weighted price index,increased at an annual…

Adam Smith was considered to be the laminitis of modern economic sciences. He was the pioneer of capitalist economy and free markets which are explained in his 1775 book. “The Wealth of Nations” . Adam Smith was a positive influence on the construction of our economic system as we know it today. Smith opposed authorities…

In a modern society. many transnational companies have been founded. They are called transnational corporations because these corporations operate in more than one state at a clip. For illustration. McDonalds. Pepsi. KFC. Nike. I will discourse the advantages and disadvantages of these corporations. For the advantages. First. transnational merchandises and services provide the best possible…

The Bhutanese economic system is predominately an agricultural and forestry based economic system, comforted with the challenge of being a landlocked state. And it is one of the universe ‘s smallest and least developed states where more than 60 % of the entire population depends on agribusiness and forestry merchandises. The economic system is closely…

Harmonizing to Investor words.com, macro environment is the external elements that exist outside of a companys control that can significantly impact its public presentation and ability to vie in its market place. Examples of macro environment elements are the economic system, authorities policy-making, engineering, societal conditions, and nature. For companies with a planetary foot-print, their…