- •Function of money
- •The supply for money. Money definition.
- •The demand for money.
- •Banking system: creating money
- •Monetary policy: goals.
- •Bank’s consolidated balance sheet.
- •Easy - money policy: essence and effects.
- •Tight - money policy: essence and effects.
- •Range of interest rate.
- •Monetary policy and equilibrium gdp.
- •Effectiveness of monetary policy: strengths and weaknesses
- •Income inequality: causes.
- •The Lorenz curve.
- •The economics of poverty. Poverty rate.
- •Welfare: elements.
- •Health care reform 2011. Russia
- •Unionism. The rate of unionism.
- •Efficiency and productivity of unionism
- •Labor market discrimination: costs and coefficient
- •Types of labor discrimination
- •Immigration. Net benefits from immigration.
- •International trade. Comparative advantage.
- •International trade: supply, demand, equilibrium
- •Types of trade barriers
- •Imf and Russia.
- •Wto and Russia
- •Capital account
- •Official reserve account
- •34. Exchange rate: types and determinats
- •35. International exchange-rate systems
Range of interest rate.
Risk 1. Loans for different purposes ceryy varying degreesof risk 2. The greater the chance that the borrower will not repay th loan 3. The more intrest the lender will charge to compensate for this risk
Maturity (the time length) 1. Long term loans command higher intrest rate than short-term loans 2. Long-term lender suffer the inconvenience and possible financial sacrifice of alternative uses for a greater period of time
Loan size 1. Of equal maturity and risk the intrest rate on the smaller of the two loans ussually will be higher
Market imperfection 1. The small-town bank which monopizes local, lending may charge high intrest rate.
Monetary policy and equilibrium gdp.
Effectiveness of monetary policy: strengths and weaknesses
Strengths:
Speed and flexibility-CB can buy or sell securities on a daily basis and so affect the money supply and intrest rate almost immediately
Isolation from political pressure- monetary policy is a more politically conservative measure. It warks more subtle.( changes in government spending and taxes can have extensive political ramification)
Problems
Less control- banking and finance are increasingly global. It may reduce or make less predictable
-changes in velocity- during reccession CB instituts easy-money policy. But when the intrest rate is lower the public will hold larger money. Balances money bills will move from hand-to-hand less rapidly-the velocity will decline.
-intrest as income. For those who pay intrest a decline in the intrest rate increases spending. For those who view intrest rate as income a decline reduces spending. It partly offsets and weakness spending of goods, homes...
Income inequality: causes.
Ability differences – people have different mental, physical talents
Education and training – people must develop their capabilities through education and training. Individuals differ in almost of education so in their capacities to earn income
Discrimination- suppose ethnic minorities or women to low paying occupation
Tastes and risks – people who choose to stay home with children, work part-time have less income that people who make the opposite choice
The Lorenz curve.
The Lorenz curve shoes degree of inequality in income distibution. The dialonal line represents a perfectly equal distribution of income. Because each of its points indicates that a particular persentage of families receive the same percentage of income. A area shows the degree of income inequality. So area B shows the greater income inequality. Lorenz Curve can be plotted to contrast the income distribution of different racial groups different countries befor and after taxes.
The economics of poverty. Poverty rate.
Poverty – condition in which a person or family doesn`t have the means to satisfy basis needs for food, clothing, shelfer and transportation. The means include currently earned income, transfer payment, saiving and property owned. Basis needs include family size, health and ages of its members.
Poverty rate – the persentage of the population living in poverty. Much poverty is hidden.
PR=Q living up/Q population
Welfare: goals and criticism of welfare system.
Welfare – public assistance program. Goals:
Be effective in getting out individuals and families out of poverty
Provide adequate incentives for able nonretired people to work.
Program`s cost should be “reasonable”
Criticism of welfare system:
Administrative inefficiency – haphazard growth of welfare has created an inefficient system characterized by depence on a huge administrative buracraty which absorbs valuade funds that could be going to the poor
Inequality – because regions can set their own benefit levels
Lack of work incentives – the welfare system reduce incentives to work
Dependency – long-term welfare payments create “a culture of poverty” because it creats dependency on the government, robbing family.
High program cost