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Give a brief description of the transmission mechanism
1. When the central bank target rate increases, other interest rates in the economy will increase (and the money supply will decrease, but that is not important here).
2. With higher interest rates, it is more expensive to borrow and more advantageous to save. Therefore, consumption and investment will decrease (we say that the central bank "cools off" the economy).
3. As consumption and investment fall, GDP is reduced and unemployment will rise. This will cause inflation and the growth rate in wages to fall.
Explain which of the two strategies is most likely to lead to development. Empirically, it seems rather evident that export-orientation has been more successful than import-sub
What is the price elasticity of demand? It is the Defining and Measuring Elasticity. The price elasticity of demand is the ratio of the percent modification into the quantit
Which is not true of the difference between sampling error and standard error? a. Standard error is a difference from the population. b. Sampling error can't usually be calcula
Suppose you have decided to do some savings. You will deposit $200 this year into an account that earns 2% per year and increase the amount deposited each year by 20% in every year
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GDP vs GNP in kenya
Explain about Economys growth rate Economy's growth rate: Long-term economic growth, or tendency growth, is the rate of growth the economy can sustain, ignoring the short-term
COMBINED ISLM MODEL
Construct two graphs that exhibit equilibrium in the petrol market - assume that there are no taxes. Clearly label the equilibrium values. (a) Graph the AFC, AVC, ATC, and MC fu
Identify trends or other patterns in inflation within the Spanish economy over the last five years using quarterly data. You must include data to justify the trends described.
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