Macro-view Flashcards
What is the mission of the World Bank Organization?
Economic development / advice & financial assistance.
What is the mission of the World Trade Organization?
Foster global trade / adjudicate trade disputes.
What is the mission of the international monetary fund?
Foster global growth and poverty reduction / exchange rate stability / lend to countries with trade or financial stress.
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - Austrian.
Excessive money/credit, money/credit expansion, nonintervention
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - Keynesian.
Inadequate demand, aggregate demand management, intervention
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - Monetarist.
Activist fiscal policy or unstable money supply, macroeconomic, stable money supply growth
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - Neoclassical.
No view, microeconomic, no intervention.
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - New Neoclassical.
policy anticipation by economic agents, macroeconomic, minimal intervention.
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - Neo keynesian.
Sticky prices and wages, macroeconomic, intervention to support demand.
Give the cause of business cycle fluctuation, policy focus and preferred govt. policy for this school of thought - Supply side.
Govt. policy, microeconomic, reduce taxes and regulations.
Where do capital inflows come from?
Foreign ownerships of domestic businesses and foreign ownership of assets (e.g. real estate)
What is the objective of restricting capital inflow?
Protect domestic industries from foreign competition and prevent credit booms and asset inflation.
Where do capital outflows come from?
Sending money abroad, converting domestic into foreign currency, foreign business repatriating profits.
What is the objective of restricting capital outflows?
prevent exchange rate deterioration, foreign currency reserves and maintain lower level of interest rates
Explain Ricardian Equivalence?
Fiscal deficits have no net effect on the economy. The govt. is deciding whether to tax now or in the future and consumers adjust savings based on deficit to pay future taxes. Govt. should focus monetary policy tools.
