(2) monetary policy Flashcards
1
Q
effects of monetary pol in open economy
A
increased interest rate (i) = decreased output and appreciation (E)
2
Q
effects of fiscal policy in an open economy
A
increased govt spending = increased output
3
Q
two main monetary policy setting tools
A
QE, setting the bank rate
4
Q
UK monetary policy inflation target
A
2%
5
Q
ECB’s main objective of monetary pol
A
maintain stability
6
Q
nominal GDP vs real GDP
A
real is adjusted for inflation, and accounts for output; nominal doesn’t
7
Q
nominal GDP formula
A
sum of quantity of goods produced x current price
8
Q
nominal GDP increases overtime because
A
production of goods increases overtime, and price of most goods increases overtime.
9
Q
unemployment rate (u) formula
A
unemployment / labour force (U/L)
10
Q
labour force formula
A
employment / unemployment (N/U)
