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7 Cards in this Set
- Front
- Back
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Given the following data
GDP=16 trillion Household Consumption= 10 trillion Total Government Spending= 3 trillion Total Net Tax= 2 Trillion a.calculate private saving |
Private Saving= y-t-c
16-2-10= 4 Trillion |
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Given the following data
GDP=16 trillion Household Consumption= 10 trillion Total Government Spending= 3 trillion Total Net Tax= 2 Trillion b. If national saving rate is 5%, what is total saving and investment? |
.8 trillion
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How do financial intermediaries help allocate savings to the best uses?
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1. Share savers risk
2. Provide information |
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What causes long-run sustained inflation?
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Too rapid growth in the money supply
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Why are there different measures of the money supply?
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B/c M1 and M2 serve as a continuum with no sharp dividing line. Money supply is a financial asset that includes more liquidity to less liquidity
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Suppose that you believe that the price of a share of Microsoft is 30$ per year/ one year. Divide it 2$ per share. How much would you pay today if 6% RDR
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(30+2) =32/1.06= 30.19$
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Last fall the Fed proposed what they call QE2. The target amount to be purchased is 600$ billion in gov. bonds. Assume that 90% of the money received is deposited and rdr=1-%
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60+540/.10= 5460 billion
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