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Q. Nominal interest rate and expected inflation?
When we have inflation, we can't, of course, presume that expected inflation is zero. So real interest rate will no longer be equal to nominal interest rate and we should use R = r + pe. Expected inflation pe is exogenous (even though not essentially constant. In more advanced Keynesian models you would find numerous assumptions on how expectations are formed.
An increase in growth rates will cause the production possibilities curve to a. shift inward. b. become steeper. c. become flatter. d. shift outward.
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suppose c=a+by and investmentI is given.assuming mpc=.80 and I=50,find static and dynamic moel question #Minimum 100 words accepted#
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distnguish betweenNational income at market price and National Income at factor cost, explain the importance of the distinction
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