Nominal interest rate

One prominent criticism of adopting a peg exchange rate regime is the loss of control over monetary policy. The simultaneous combination of a fixed exchange rate regime and open capital markets with an independent monetary policy constitutes the Impossible Trinity. If the exchange rate is pegged and capital is mobile, then the domestic nominal interest rate must equal the foreign nominal interest rate. Lack of effective local monetary policy is harmful, especially when a country is hit by domestic

Table of content 1. Abstract 2. Introduction 3. How can a country be regarded as developed or underdeveloped 4. Definitions of currency 5. exchange rate theory determination 6. Stability of a currency 7. How is stability achieved and why is it an utmost important for countries to sustain 8. How did the developed countries managed to have achieved strong and stable currency and why are the developing countries failing to achieve that. 9. Merits and demerits of a country having strong currency, and

that is was the principle of the Fed maintaining short term interest rates too low for a too long of a period of time, go on to say that the Fed policies on interest rates did in fact contribute to the housing bubble (Gordon, 2009) Prior to the crisis, investments in the residential space saw a significant shift around 2002. Prior to that, residential investments over almost a 30-year period was estimated between 4 and 5 percent of the nominal gross domestic product. In only a short period of time from

Inflation It’s causes, effect and remedies. By: Subrat Choudhury Inflation and Deflation I INTRODUCTION Inflation and Deflation, in economics, terms used to describe, respectively, a decline or an increase in the value of money, in relation to the goods and services it will buy. Inflation is the pervasive and sustained rise in the aggregate level of prices measured by an index of the cost of various goods and services. Repetitive price increases erode the purchasing power of money and other financial

There are a lot of issues that can affect our economy today. Like product unemployment rate and interest and decrease rates. Let’s look at how purchasing groceries, layoff and taxes can affect our households, businesses and government. GDP is a basically the market value of services and good that produced in the country. Product GDP, Nominal GDP, Real GDP, Inflation rate, Unemployment rate, and Interest rates. This is considered an indication of living situation that are in a country. It affects

better measurement then nominal GDP for the basic fact that the value of a loaf of bread is remained unchanged, but because of the fluctuation of the inflation, that makes it market price different. GDP's components consist of consumption, government spending, investment, and net export (export minus import). Consumer consumption is considered as the most important fragment of GDP, taking up about 70% of a country's GDP. If the economy is doing well, unemployment rate and inflation are kept low

estimating cash flows associated with a project involves working capital requirements, project risk, tax considerations, expected rates of inflation, and disposal values. It is necessary to understand existing markets to forecast project revenues, assess competitive impacts of the project, and determine the

Consider a situation where there are only 2 countries, say, China with the Chinese yuan as its currency unit and Japan with the Japanese yen as its currency unit. We can express the exchange rate as either the number of yuan per yen, or its reciprocal the number of yen per yuan. For instance, suppose that the exchange rate, defined as the number of yen it takes to buy one

historians have identified the 16th to early 17th centuries in Europe as a period of long-term inflation, although the average annual rate of 1 to 2 percent was modest by modern standards. Major changes occurred during the American Revolution, when prices in the U.S. rose an average of 8.5 percent per month, and during the French Revolution, when prices in France rose at a rate of 10 percent per month. These relatively brief flurries were followed by long periods of alternating international inflations

In 2005, Arcadian Microarray technologies, Inc. were in talks with Sierra Capital Partners to sell a 60% equity interest for $40 million to fund the growth of the company. Sierra Capital is a private equity investment company with $2 billion under management and a portfolio of 64 venture capital investments and leverage buyouts focusing strictly on the life sciences sector. Arcadian Microarray is a biotechnology firm founded in 2003 and located in Arcadia, California. The business was made up of