Philips curve/okun law/monetary policy/bonds

Question 1

what is yield curve

Answer 1

Short term yields higher than long term yields. This is when Fed increases federal fund rates to reduce inflationary pressure.

Question 2

How do oil prices impact phillips curve?

Answer 2

Oil prices are a form of cost shock, , and therefore impact the Phillips curve.We should see an increase in the rate of inflation, and we did

Question 3

`what is the quantity equation

Answer 3

The quantity equation is given by MtVt = PtYt, where M is money supply, V is velocity, P is the price level (GDP deflator or CPI), and Y is real GDP. In growth terms this is g M    g y .

Question 4

what is the fisher equation?

Answer 4

The real interest rate, R, is given by the Fisher equation Rt = it - pie, where i is the nominal interest rate and pie is the rate of inflation. If pie is greater than i, the real interest rate is positive. which states that the real interest rate is equal to the nominal rate minus inflation

Question 5

what is okuns law

Answer 5

Okun’s law is the inverse relationship between the cyclical unemployment rate and the output gap.
Essentially, it states that for every 1 percent increase in the output gap, the cyclical unemployment rate will fall by 0.5 percent. Okun’s law is the inverse relationship between the gap and the unemployment rate

Question 6

What is the phillips curve

Answer 6

The Phillips curve is the positive relationship between inflation growth and the output gap.