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Q. Determine the Exchange rate? Exchange rate is determined by the ratio of domestic price level to the foreign price level. If, for instance domestic prices increase by 10% wh
Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66.
Aggregate Supply (AS) We now shift our attention to the supply side of the macroeconomy. Aggregate supply explains the production and pricing side of the economy and the behav
Economic Growth Cyclic Fluctuations At this stage, it is useful for us to understand the difference between economic growth and cyclical fluctuations. Economic Growth Econo
From estimating the aforementioned unrestricted VAR, a table of coefficient and statistics will be produced. From this table, certain statistical information can be analysed, such
The Government, Rest of the World and the financial markets total expenditure of government can be divided into two parts: transfers to private sector and consumption.
Explain the Exchange rate system in western world The most common exchange rate system in western world during previous century was the fixed exchange rate system. Up to 1930s,
In the heckscherohlin model, a decrease in the factors of production required to produce rice and beans would: a. shift the production possibilities frontier for rice and beans
The Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price
Determine the principle of equity The principle of equity is that a tax must be fair and the tax is levied on those with the ability to pay tax. The principle of efficiency
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