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Determine the main target of monetary policy
Since 1997 'official' main target of monetary policy has been to 'hit' inflation rate target set by government. Though since the onset of recession in 2008 Bank of England has set interest rates to stimulate aggregate demand. Low interest rates try to achieve this objective in 2 ways. First, households with large mortgages have been able to take advantage of 0.5% rate and pay off debt. Second, saving has become unattractive and so, in theory at least, people decide to consume instead of saving.
#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function
The annual fixed cost for a light fixture manufacturing company are $38,000, and the variable costs are $40 per unit. If the selling price per unit is p = 485 - 1.395X, what is the
Example of Indirect Taxes and Subsidies- ACCOUNTING SYSTEM We now permit our government to impose what are called indirect taxes. This category includes sales tax, excise tax,
Marginal propensity to SPEND refers to: a. a nation's additional spending on a good per an additional unit of expenditure. b. a nation's additional consumption based on a unit incr
The AS curve Say that nominal wage in year 1 (at a particular point in time) is equal to 1000. On the horizontal part of response curve, real wage is constant and equal to its
Why do some countries have a low real per capita income? Low real per capita income considers being largely due low productivity (i.e., output per worker) of low valued added
estimate paper by stock and watson in a bayesian manner
Inflation (RPI) - another imperative channel. Oil is a necessity for the UK, and is price inelastic therefore one can analyse the correlation between a price shock and inflation. I
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world, in
reason why the change in equilibrium of output is greater than the change in initial invest ..
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