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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 economy shows the following features C=50+0.9(Y-T) T=100 I=100-5i G=100 L=0.2Y-10i M/P=100 X=20 M=10+0.1Y a)Obtain the IS and LM for this economy b)Find out the equilibrium inc
How central banks increase the monetary base When the Central Bank cuts the target rate, they must simultaneously increase the monetary base by buying government securities. The
(A) What is the difference between a movement along a demand or supply curve and a shift of one of these curves? Why is it important to distinguish between the two? What mistake
What is money wage rate While the money wage rate or nominal wage rate is the hourly wage rate calculated in money that a worker receives for supplying labour, the real wage r
A, Explain how a person can be free to choose but his or her choices are casually determined by past event 2 B , Draw the casual tree for newcomb''s problem when Eve can''t perfe
Marginal Propensity to save (MPS) is the ratio of change in total saving to change in total disposable income. Symbolically, MPS = ?S/?Y For example, total
if we impose any rule and regulation on clasical model like not expoit polutionso what is effect on factor of clasical model
Let kids denote the number of children ever born to a woman, and let educ denote years of education for the woman. A simple model relating fertility to years of education is kids =
outline two main restrictions by indian government applied to import. Using the data from your case study analyse and explain who would benefit directly and who would lose directly
Q. Explain function of AS-AD model? The function of AS-AD model is to extend IS-LM model so that we can analyze situations where Y > Y OPT . To achieve this, we should make P e
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