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Yasin Sahinci 11081287 Elias Sarwari 11108762 Ali Akbari 11110678

This document discusses several macroeconomic topics including inflation, the Phillips curve, the balance of payments, and the relationship between macroeconomic objectives. It defines inflation as the annual percentage increase in prices and outlines some of the costs of inflation. The Phillips curve shows the statistical relationship between wage inflation and unemployment. The breakdown of the Phillips curve is also discussed. The balance of payments account tracks the flow of money between a country and the rest of the world, including the current account, capital account, and financial account. Exchange rates and their appreciation and depreciation are also covered.

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Mufit Ivriz
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37 views21 pages

Yasin Sahinci 11081287 Elias Sarwari 11108762 Ali Akbari 11110678

This document discusses several macroeconomic topics including inflation, the Phillips curve, the balance of payments, and the relationship between macroeconomic objectives. It defines inflation as the annual percentage increase in prices and outlines some of the costs of inflation. The Phillips curve shows the statistical relationship between wage inflation and unemployment. The breakdown of the Phillips curve is also discussed. The balance of payments account tracks the flow of money between a country and the rest of the world, including the current account, capital account, and financial account. Exchange rates and their appreciation and depreciation are also covered.

Uploaded by

Mufit Ivriz
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Yasin Sahinci 11081287 Elias Sarwari 11108762 Ali Akbari 11110678

*Inflation *Philips Curve *Balance of Payments *The Relationship between the 4


Macroeconomic Objectives

*Extra Research

*What is Inflation?
* Measurement of the annual percentage increase in prices = rate
of inflation

* The Costs of Inflation

* The original Philips Curve


* Statistical relationship between wage inflation and
unemployment ( 1958 )

* The curve illustrates the effects of changes in aggregate demand. * Money illusion

* The breakdown of the Philips curve

unemployment and inflation, traced out by a Phillips Curve. What could cause a leftward shift in this curve

* Assume that there is a trade-off between

* What is the balance of payment account?


* Flow of money between residents of a country and the rest of
the world.

* The three main parts of the balance: * Current account


* Capital Account * Financial Accunt

* The Current Account


* Trade in goods * Trade in services * Net income flows * Net current transfers

* Capital Account
* Net capital transfers

* Financial Account
* Investments * Other financial flows * Reserves

* Exchange rates
* The rate at which one currency trades for another on the foreign
exchange

* Appreciation Depreciation

* Possible causes of a depreciation


* A fall in domestic interest rates * Higher inflation in the domestic economy than abroad * A rise in domestic incomes relative to income abroad * Relative investment prospects improving abroad * Speculation that the exchange rate will fall * Longer-term changes in international trading patterns

* Managing the exchange rate


* Reducing short-term fluctuations: * Using reserves
* Borrowing from abroad * Raising interest rates

* Maintaining a fixed rate of exchange over the longer term:


*Deflation * Supply-side policies * Controls on import and/or foreign exchange dealing

* Short-term relationship between the four


objectives

* The long-term relationship between the


objectives

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