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Q. Explain how an increase in government spending would affect the DD-AA schedule in the short run.
Answer: A raise in government spending will raise aggregate demand, which will shift the DD to the right. If AA leftovers unchanged the new equilibrium will be at a higher Y and lower E. Ever since E is the nominal exchange rate a lower E is an appreciation of the currency.
Q. International trade leads to complete equalization of factor prices. Discuss. Answer : This statement is usually "true...but". Under a limited and strict set of assumpti
Application of defferential calculus in economics
The latest economic investigations report that the recent earthquake, tsunami and nuclear disaster have led to an economic recession in Japan. This recession may reduce the demand
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Q. What can you learn from the figure below, which depicts the US GNP and its components for the year 1997? Answer: The U.S. GNP is about 8 trillion expenditure represents
who promotes globalization
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