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If the price level depends on both the current money supply and future expected money supplies, in order to stop a hyperinflation, a central bank may try to establish credibility b
Introduce about the open-economy macroeconomics shortly. The Open Economy: a. One of the major concerns introduced through open-economy macroeconomics is the exchange rat
Assume in country-A Central Bank cares only about keeping the price level stable & in country-B, its central bank cares only about keeping output & employment at their natural rate
Explain the meaning of a production possibilities curve
The structural deficit: A. falls as the economy expands and rises when it contracts. B. changes as actual income changes regardless of potential income. C. does not change when inc
The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
Diagramatic explanation of pareto optimality
How central bank increases the target rate Let's say that the central bank increases the target rate. When the target rate increases, the central bank needs to raise the overni
If the price of a good rises, what are people likely to do? a Substitute a less expensive good b Buy more of the good c Buy more of all goods because of added buying power d All of
what cause keynesian unemployment?
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