Commercial paper is typically offered at a long-term maturity of at least five years. Equilibrium Intelipath 1 No change in quantity or price A smaller quantity being sold at a higher price A larger quantity being sold at a lower price Which of the following best describes the condition an increase in demand for iPhones and an increase in supply of iPhones? It hit a high of 24.9% in 1933, and was still 14.6% as late as 1940. The desire of the American public to earn money and not spend it, which caused the unemployment of the previous decade, now dovetailed well with the public sector demands for war production, and unemployment was, for all practical purposes, eliminated. An agent’s net financial assets are reduced whenever either the agent increases its outstanding debt, or reduces its stock of financial assets. Currently the Fed enforces certain minimum reserve requirements. The ELR can be considered a labor standard policy that continuously defines the value of a dollar by the quality of ELR labor that can be hired at a given price. E) if next year some prices increase by only 4% FIGURE 23-5 7) Refer to Figure 23-5. The government has embraced two primary economic objectives: price stability and full employment. This neutralizes any monetary system bias implied currently by a government policy that does not allow actual H(nfa) to match desired H(nfa). Beginning with the deficiency condition: The Fed replaces an overdraft with a loan: Even if Bank A did not cover the deficiency, the Fed will book the overdraft as a loan and charge an appropriate penalty. Increasing or decreasing loans, and thereby deposits, for example, does change future reserve requirements, but cannot alleviate a current imbalance. Disinflation describes a falling inflation rate. Equally important, stable prices allow people to rely on the dollar as a measure of value when making long-term contracts, engaging in long-term planning, or borrowing or lending for long periods. These programs were ultimately unsuccessful at reducing unemployment, no matter how many potential participants they eliminated, as a given percentage of unemployed became a tool to limit price and wage increases. Firms will produce more only if prices increase. H(nfa) can be determined directly by the private sector as it decides the total quantity of ELR labor it sells to the public sector. Furthermore, those left working are, in real terms, supporting those living on interest income. It is then fiscally and monetarily constrained to a policy that spends little enough on non-gold items, and adjusts interest rates, to maintain a desired buffer stock of gold. The Fed requires member banks to maintain minimum reserve balances known as required reserves. Company profits decreased in 2013 by 15%. Nor will repayment of existing loans modify the deficiency. a. most futures contracts result in delivery. This is the basis of the concept of endogenous money, the major theme of Post Keynesian monetary thought. It will occur when the private sector, in aggregate, desires to work and earn the monetary unit of account, but doesn’t desire to spend all it would earn if fully employed. A reserve excess or deficiency is defined as the banks having either an excess of reserves above the required level or a reserve total that is below the required level. With a private sector desire for H(nfa), and a government that fails to run a deficit large enough to accommodate that desire, the corresponding unemployment can be severe. 2. Investment, for example, is accounted for as savings in national income accounting, so, by definition, total investment will always equal total savings. 47) Which of the following best describes a competitor with an ability to develop new products? Furthermore, the level of government deficit spending determines private sector H(nfa). The Keynesian mainstream proposes ending unemployment by increasing aggregate demand through low interest rates and increased deficit spending. For example, when the central bank buys foreign currency, it is the same, for cash flow analysis, as the treasury buying military equipment. If one of the other determinants changes, it will … Excess reserves do have value if they can be utilized to repay loans from the Fed, to purchase new Treasury securities from the Treasury, or to purchasing existing Treasury securities from the Fed’s current portfolio. Defining the dollar by the ELR labor that can be purchased at the margin does not mean all prices will be constant forever. However, as a reserve deficiency is automatically booked as a loan, the Fed’s only real option is to set the price its loan of needed reserves to the commercial banking system. It is, however, designated by the government as the only means of discharging federal tax liabilities. For purposes of this analysis, government spending includes spending by the government or any of its agents. Calculate the cost of the product. In addition to zero unemployment, it will be shown that this ELR policy establishes price stability not entirely unlike many proposed income policies have been designed to do. Government constraint of q to control p means using continuous unemployment and excess capacity to maintain price stability. When the Fed credits a member bank’s reserve account and debits its own account, total reserves in the commercial banking system are increased. Rates were increased to about 2.5% until May of 1932, and then remained well under 1% until 1948. If they are correct, there would eventually be an equilibrium condition with the ELR pool dwindling to 0. If no agent is willing to reduce his net financial assets, the desired sale of labor does not occur. A gold standard uses the monopolist’s alternative of setting p, in this case the price of gold, and letting q, the quantity of government spending and lending, float. The sale of newly issued government securities by Treasury affects the private sector in exactly the same way as the sale of securities by the Fed from its portfolio of existing government securities. The ELR proposal establishes a minimum wage standard, as the government is willing to employ anyone at the ELR wage. So, for instance, your new computer might cost you 100 to 150 bushels of corn at today's prices, but you would find it most helpful if the price were set in terms of money because it is a common measure of value across the economy. In this case, Bank A’s reserve account is overdrawn. Raising revenue, per se, is of no consequence to the government, as dollars are not a limited government resource, but a liability, or tax credit, that can be issued at will. In other words, the Fed can only react to imbalances by offsetting them. This led to various extremes such as suspending domestic convertibility in 1934, and making it illegal for domestics to own gold, as well as strong support for balancing the federal budget. Therefore, this study will first focus on why the fear of deficits per se is unwarranted. a. This carries an implied cyclical tendency towards increasing money value during periods of private sector increases in desired H(nfa), and vice versa. Private sector output would decline as workers left their jobs, and private sector income would rise from the higher paying ELR jobs. The demand curve shows how the quantity changes in response to price. The real result of reducing the labor force is reduced output. It may be possible, for example, to repair, rebuild, enhance and maintain the public infrastructure without a decrease in private consumption from current levels. What prevented such policies from being viable and sustainable in the past – the gold standard and other fixed exchange rate policies- are long gone. Additionally, unlike gold, non-homogeneous labor means that as the pool of ELR workers shrinks, the remaining ELR workers would be increasingly less valuable to the private sector, and the currency may begin to get redefined downward at an increasing rate. The sale of Treasury securities supports the overnight interest rate determined exogenously by the Fed. It was followed by the WPA in 1935. Taxes function to create a need for dollars, so the government can use dollars to purchase real goods and services. We currently have a monetary system that can accommodate both full employment and price stability on a permanent basis. If fiscal policy is such that all of the $12,500 government workers are hired by the private sector, then the market price of ELR labor has risen beyond $12,500, and the currency has been redefined downward accordingly. Spending is limited by what is offered for sale, not by revenues. This increases government spending and the deficit, allowing actual H(nfa) to increase to the level desired by the private sector. This means that the price increased at a stable rate, not that the price levels remained stable. a. This reduces government spending. Monetary policy is the policy adopted by the monetary authority of a nation to control either the interest rate payable for very short-term borrowing (borrowing by banks from each other to meet their short-term needs) or the money supply, often as an attempt to reduce inflation or the interest rate to ensure price stability and general trust of the value and stability of the nation's currency. Prices would rise as both costs and incomes were being pushed up. Ironically, it has chosen a monetary and fiscal policy that utilizes excess capacity, including unemployment, to maintain price stability, obviating the possibility of simultaneous achievement of both objectives. The imperative of taxation is to create sellers of real goods and services willing to exchange them for the unit of account selected by the government. Anyone who lives entirely on his interest income may otherwise need employment. Disinflation describes a falling inflation rate. Great effort was taken to ensure that rationing was perceived as equitable ensuring public support for the program. 10) In relation to target costing, which of the following best describes target cost per unit? Είναι δωρεάν να κάνεις εγγραφή και να δώσεις προσφορά σε εργασίες. a. an increase in government spending and a fall in unemployment b. an increase in inflation and a decrease in output c. a decrease in the inflation rate and a rise in the unemployment rate d. a decrease in the money supply and a rise in unemployment. The desired H(nfa) of the foreign sector is a factor since it is part of the total desired H(nfa). At some point prices would stabilize in line with the ELR wage. In no case must the government fund itself in dollars. The percentage tells you how quickly prices rose during the period. Financial transactions are accounting information, and not considered as imports or exports. It is noteworthy that these programs did not come about until after several years of troubling unemployment, and fell short of solving the unemployment crisis and ending the depression. The government sets the ELR wage and lets the market allocate all other resources accordingly. Reserve balances are assets of the member bank, and bank liabilities are assets of the Fed. Microeconomic theory details the logic, which concludes that a monopolist, controlling an absolute necessity, sets price, one way or another. In other words, real economies that do not use money and money labor contracts to organize production (e.g., feudalism, slave economies, South Sea Islanders discovered by Margaret Meed, etc) may possess important nonlinearities and even an uncertain future — but there is never an important involuntary unemployment problem. In the absence of financial intervention by the government, if one agent desires employment in order to increase his holdings of financial assets, another must decide to reduce his net financial assets for a transaction to take place. The ELR program allows for the elimination of many existing government welfare payments for anyone not specifically targeted for exemption, as desired by the electorate. Which of the following best describes the duties of a "Rights Agent"? With no other banks in deficit at the Fed, the overnight rate, known as the fed funds rate, would fall to 0 bid. Deficit spending without security sales from the Treasury or the Fed would create a reserve excess and result in a “0 bid” for overnight deposits. Mobile phones do not require the massive infrastructure investment that mainline If the desired H(nfa) is greater than the actual H(nfa), the evidence is involuntary inventory accumulation and a contractionary bias. Entries on one side of the ledger must be accounted for with offsetting entries on the other. asked Jun 15, 2016 in Business by TexasDiamond1 A) A subsidy essentially lowers the prices of foreign goods rather than raising the prices of domestic goods. This is commonly referred to as viewing the treasury and central bank on a consolidated basis. Exports are real goods and services leaving the country, and imports are real goods and services entering the country. The U.S. was on a gold standard, and policy had to include managing the national gold supply. These include child labor laws, education for veterans, aid for single mothers, and even social security. To be blunt, involuntary unemployment exists because the federal budget deficit is too small. They are price, the price of alternatives, income, tastes, and expectations. The public would associate higher trade deficits with an increasing standard of living, lower taxes, and other such benefits. To minimize disruption, an initial ELR wage should be one that is not so high as to draw workers away from the private sector, and not so low as to require a general deflation to bring actual H(nfa) in line with desired H(nfa). In this scenario, a single firm does not have any significant market power. Which of the following statements is CORRECT? An analogy can be drawn, for example, with an electric utility monopoly although taxes give the currency monopolist a tool to regulate demand that the electric utility monopolist does not have. Which part(s) of the Environment seem to be the most challenging for Nature's Own, To what extent did the lecture by Nadine Burke Harris address each of the following levels of social environments in terms of their implications for d, Given the volatile nature of today's global economy and the realities of the modern employment environment, companies should be able to make or break, Does the RH strategy work only for high-end/prestige products or are there elements of its approach that would be appropriate for retailers at all pri, RH's CEO believes that the Internet is limited in its ability to facilitate differentiation among retailers. Slaves are always fully employed as well as are serfs in feudalism…….Finally it should be noted that herds of animals, schools of fish, etc organize together to solve the economic problems of What? Which of the following best describes how U.S. oil prices and use. If either bank originates a new loan and creates a new deposit, assets and liabilities will increase equally, leaving the size of the deficiency unchanged. 2) The value of a currency is determined by the prices paid by that government. While Japan experienced deflation between 2010 and 2013, the inflation rate became less negative, so actually increased over that period. a. More productive employees will be able to command a higher wage, though general productivity increases by business will not result in higher wages if a given job can be performed equally well by a $12,500 ELR worker. * Horse owner that rides for pleasure Horse owner that rides at a competitive level Breeding and growing horses is an interest of mine When riding, what is your preferred discipline * Campdrafting Dressage Endurance Eventing Pony Club Showing Show Jumping Team Penning Western Other a. Thus, whenever the government engages in deficit spending, aggregate private sector H(nfa) is increased, with H(nfa) including offshore holdings of dollar denominated assets. If this were deemed too disruptive, the same fiscal constraint could be matched with an increase of the ELR wage, say, to $15,000 per year. The government is the monopoly issuer of the dollars needed by the private sector to pay taxes. A fixed exchange rate would present problems similar the gold standard since the gold standard is, for all practical purposes, a fixed exchange rate system. Under the ELR proposal, the government adjusts fiscal and monetary policy to maintain the ELR pool much the same way that a government adjusts fiscal and monetary policy to maintain a buffer stock of gold with a gold standard. Which of the following statements best describes the optimal capital structure? It can then be stated that if the private sector wanted to use some of its full employment income obtained by selling real goods and services to be held as H(nfa), the evidence is some combination of involuntary inventory accumulation and involuntary unemployment. Competitive equilibrium is a condition in which profit-maximizing producers and utility-maximizing consumers in competitive markets with freely determined prices arrive at an equilibrium price. This increases government spending (and the budget deficit) which may result in other industries hiring workers away from the government. Charles Goodhart The current monetary system can sustain both full employment and price stability over the short and long run. Do you agree? The value of the currency is the ELR wage, since that is what the government, the monopoly supplier of its money, has decided it will pay. In this way, a nominal wage scale emerges. Money taxes were introduced on numerous items: cattle, land, houses, and the people themselves. Volatility Quote Trading: A method of quoting option contracts whereby bids and asks are quoted according to their implied volatilities rather than prices. How does the monopolist price his product? As long as the buffer stock and legal convertibility are in place, the price of gold set by the government is the currency’s value. Let us assume the commercial banking system is in balance with all banks satisfied with their current reserve balances as in figure 4: A 100 payment from the Treasury to Bank B’s customer is facilitated by the Fed debiting the Treasury’s Fed account and crediting Bank B’s reserve account: Assuming for simplicity there are no reserve requirements, this creates an imbalance in the commercial banking system known as a system wide reserve excess. Paul Davidson GNP reached a high of $203.6 (billions of 1958 dollars) in 1929; fell to a low of $141.5 in 1933, and by 1939, had crept up only to $209.4. Increased government deficits that arise when the pool of $12,500 ELR workers increases always match the desired H(nfa) of the entire non-government sector. Funds are loaned, either directly (including overdrafts) or via open market purchases of securities, in the case of a reserve deficiency. The normal operating procedure is for the Fed to offset factors that cause reserve imbalances, called operating factors, with open market operations. 1.The retail price of a sweater is $75 and the initial markup is 51 percent. The largest deficit of the 1930’s was 5.9% of GNP in 1934, and it was down to 0.1% of GNP by 1938. If, therefore, in the private sector one agent wishes to increase his holdings of net financial assets, H(nfa), this desire can only be satisfied by the reduction of another agent’s holdings of H(nfa). 232. @BvddyCorleone @profplum99 @SpongeMacro @AJWhite47339434 Saudis always had excess capacity. Question: Comparing Operating Characteristics Across Industries Following Are Selected Income Statement And Balance Sheet Data For Companies In Different Industries. Price is set through the ELR wage, which defines the purchasing power of the currency. The government sets a price at which it will buy and sell gold, and makes all other purchases at market prices. The efficient market hypothesis theorizes that the market is generally efficient, but is offered in three different versions: weak, semi-strong, and strong. The currency, meanwhile, remains defined by the labor that can be purchased for $12,500. However, most central banks are not legally bound to guarantee convertibility of their home currency to another currency at predetermined rates. To offset the inflation risk inherent in this policy many Keynesians propose various government legislated incomes policies. Only one price, the ELR wage, has been used to define the currency. d. One key advantage of a residual dividend policy is that it enables a company to follow a stable dividend policy. Which of the following best describes how U.S. oil prices and use of coal would likely change without the benefit of the oil in the Exclusive, Need Help with this question.. 1 The Federal Reserve's Federal Open Market Committee (FOMC), 2 which sets U.S. monetary policy, has translated these broad concepts into specific longer-run goals and strategies. Public works programs that were ‘paid for’ by other spending cuts or by tax increases could not reduce unemployment as there was never enough net government spending to accommodate desired H(nfa). There is no evidence that government understands this paradigm. You own 100 shares of Troll Brothers’ stock, which currently sells for $120 a share. The government must limit its non-gold spending to less than the demand for the currency created by taxation, so the excess demand for the currency is evidenced by gold sales to the government. Since reserve requirements are determined by a deposit count from a previous time period, and reserve accounts do not pay interest, demand for reserves is inelastic. Which of the following statements best describes the supply side of Economy B? In other words, if the deficit increases by $50 billion, that number, by definition, matches the private sector’s desire to net save financial assets. 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