Monetary policy and fiscal

1) Operation sul open market :

Draft of an participation from part of a central bank them which acquires in exchange for tito them currency, increasing therefore the currency amount, or sells in exchange for tito them currency reducing some the amount in circulation. All to the aim to modify the interest rate.

 

2) Effect of a purchase of tito them from part of the central bank them:

It reduces the titles them available rendering them more beloveds but lowering of the rendering that is lowering the interest rate.

 

3) monetary Expansion :

An increase of the currency offer agrees in order to reduce the interest rates.

 

4) Effect of an increase of the currency offer :

Interest rates are reduced i and subsequently it increases the aggregate demand.

 

5) Mechanism of transmission:

Process with which the variations in the monetary policy they influence on the aggregate demand. It articulates itself in 2 makes itself :

to)     Imbalance of pocketbook variation of the interest rates determines one

b)    the variation of the interest rate influences the aggregate demand

 

6) Describe the pocketbook imbalance:

Increasing to the offer of currency and therefore the availability of currency, the plebe it tries the way to invest it therefore increasing the demand for obligations, these will increase of price and diminuiranno their rendering.

 

7) Cases in which an increase of the currency amount variation of the interest rate does not determine one:

In the trap of liquidity in how much curve LM is horizontal therefore an increase of the currency amount does not determine one variation of the interest rates.

 

8) Describe the trap of the liquidity  :

In presence of interest rates many bottoms, the plebe are disposed to keep whichever amount of currency, in as far as rendering parity the currency are more easy negotiable. To this situation a horizontal curve LM and therefore the monetary policy corresponds (increases of the currency amount) is not in a position to influencing the interest rate. One expansive fiscal policy increases the expense public but it does not increase the interest rates and therefore not there is spiazzamento.

 

9) Describe the case classic :

It corresponds to vertical curve LM, in correspondence of which the monetary policy has the maximum effect on the level of the yield, while the fiscal policy does not have some effect on the level of the yield in how much trasla the is.

 

10) expansive Fiscal policy:

Draft of one political which increases the public expense with consequent increase of the yield of equilibrium.

 

11) Describe the spiazzamento :

Draft of that phenomenon for which one expansive fiscal policy increases the expense public determining per² an increment of the interest rates, and in such a way reducing the destined expense to investments and also the product.

 

12) When not verification the spiazzamento :

to)     When an increase of the question having itself the full occupation determines only an increase of the prices

b)    In truth the yield increase determines also a saving increase for which the enterprises they can mainly be financed that not in absence of a yield increase.

c)     If there is unemployment the interest rates not necessarily grow in answer to an increase of the public expense.

 

13) accommodating Monetary policy :

In presence of one expansive fiscal policy the currency offer, than normally is constant, comes increased in such way to prevent increases in the interest rates.

 

14) Subsidy to the investments :

The satisfied state a part of the quota the cost of the investment supported from the enterprise. It determines an increase of the consumption and the investments.

 

15) conservative economic Politics:

During the recession the taxes are reduced while in phase of expansion the public expense is reduced.

 

16) not conservative economic Politics:

During the recession it increases the expense public while in phase of expansion they increase the taxes.