Currency, interest and yield
1) Interest rate :
It is the yield anniversary, of every Lira, that it is perceived from those who lend money to AP.
2) Relation between interest rates and programmed level of yield :
Increasing the interest rates, the enterprises take little moneies on loan in order not to pay strong interests therefore invest little and consequently the yield diminishes.
3) Thing determines the inclination of curve IS :
If the sensibility of the investments to the interest rate is elevated, small variation of the interest rate will be enough one to increase to a lot the yield and therefore the curve will be flat.
4) Enounce the interest rate in function of the yield:
5) Curve of equilibrium of the market of assets IS:
It is the place of the combinations of the interest rate and the such level of the yield that the market of the assets is in equilibrium.
6) As curve IS is constructed :
They are brought back in the plan iY, the braces of points that like have ordered to a data value of the interest rate and abscissa, the value of the yield of equilibrium considering the curve of the aggregate demand relative to that data costante the TO = To Y - bi.
7) Because curve IS is tilted negatively :
Greater he is i, and more the expense for investments is reduced, therefore the aggregate demand is reduced and therefore the level of equilibrium of the yield is reduced.
8) EDG :
Excess Demand Goods, draft of the points that are found under curve IS in which there is an excess of question of assets.
9) ESG :
Excess Supply Goods, draft of the points that are found to of over of curve IS in which there is an excess of offer of assets.
10) Markets of the activities financial institutions:
Markets in which they come exchange currency, obligations to you, set in action, rooms and other shapes of wealth.
11) Obligation:
Engagement of future payment to its owner of sure amounts agreed of currency in prestabilite dates.
12) patrimonial Activities :
to) currency (circulating I placed to you)
b) obligations
c) sets in action
d) real activities (machinery, lands, rooms, durable consumer goodses)
13) patrimonial Tie budgetary :
The sum of the questions of currency and obligations of a person must be equal to its wealth.
14) nominal Question of currency :
Question of a sure number of Liras from part of the persons.
15) real Question of currency :
Question of currency expressed in terms of the number of unit of assets that it must be in a position to buying.
16) On what the real question of currency depends :
to) from the yield more the yield it is elevated and more need is had than currency in order to consume
b) from the rates interesse more the interest rates are elevate to you less have need than currency in order to consume
17) Relation of equilibrium between the market of the currency and the market of the obligations :
18) Question of currency :
L = kY - hi
The currency question in fact grows if it increases the yield and it diminishes if they increase the interest rates.
19) Curve of equilibrium of the money market:
It is the place of the combinations of the interest rate and the such level of the yield that the real question of currency equals the offer.
20) As curve LM is constructed :
One considers real offered relationship M/P = of currency, constant and for every yield currency in order which interest rate this equals the real question of currency.
21) EDM :
Excess Demand Money, draft of the points that are found under curve LM in which there is an excess of currency question.
22) ESM :
Excess Supply Money, draft of the points that are found to of over of curve LM in which there is an excess of currency offer.
23) Speed of adjustment of the market of the assets and the market of the activities :
The market of the activities is fixed very more quickly because for the market of the assets it is necessary to change the production plans.
24) Multiplier of the fiscal policy :
The level of equilibrium of the yield to parity of real offer of currency establishes of how much an increase of the public expense infuences.
25) Multiplier of the monetary policy :
The level of the yield of equilibrium in answer to an increase of the currency offer, to parity of fiscal policy indicates of how much modification.
