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(a) Describe clearly how the interest rate is determined in:
(i) Loanable Funds Framework; and
(ii) Liquidity Preference Framework.
(b) According to Liquidity preference analysis an increase in money supply always leads to a fall in the rate of interest.
Describe using diagrams, how an increase in money supply leads to a fall in the interest rate.(c) Critically assess the statement in part (b)
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if a bank has $6000 in checkable deposits and the required reserve ratio is 0.2 then the bank can lend how much money?
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use of diagram how the price mechanism operates to allocate scarce resources. use examples to illustrate the answer.
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Preference to Non-debt Creating Capital Flows: The most important element of strategy has been the paradigm shift in the attitude towards inflow of capital from abroad. Capit
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