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Preference to Non-debt Creating Capital Flows:
The most important element of strategy has been the paradigm shift in the attitude towards inflow of capital from abroad. Capital inflow from abroad was treated more generally as a device to finance CAD. Now non-debt creating capital inflows, specially FDI, are being encouraged on account of their positive impact both in terms of technology and the stabilising role in external sustainability. The policy has, therefore, been to gradually liberalise capital account. ? Recognising that liberalisation of capital account needs to be treated as a continuous process, the approach is based on a careful and continuous monitoring of certain preconditions/signposts such as monetary and fiscal discipline, exchange rates, structural reforms, etc. ? Stabilisation and strengthening strict fiscal and monetary discipline to control aggregate demand. Monetary policy aimed at slowing down the growth of money supply.
Jeremy is an economics student who loves hamburgers. He could eat any number of them for dinner, but he gets a really bad stomach ache after eating a certain amount. In fact, his u
Purchasing power parity: When PPP holds, the domestic currency has the same purchasing power at home and in any other country. PPP also implies that a foreign currency will de
why does the quantity of education change in the private universities much more responsive than salt as to changes in price?
Individual Demand Substitutes and Complements 1) The two goods are considered substitutes if an increase (decrease) in price of one lead to an increase (decrease) in quant
1. Suppose that there is a credit market imperfection because of asymmetric information. In the economy, there are N consumers. A fraction b of consumers consists of lenders, who e
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Graph the following example and answer the questions: The United States and Japan only produce two goods. They have the same fixed resources and they are equally efficient, and bo
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Deficiency of iodine Inadequate iodine also leads to dry skin, loss of hair, exhaustion and sluggish reflexes. For the developing fetus, infant and young children, iodine deficienc
Neutrality: Bureaucracy is apolitical and neutral. Prof. Frocderich mentions the following features of bureaucracy: (i) differentiation of functions, (ii) qualifications for o
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