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Oil price shocks lead to large adverse supply shocks in the macroeconomy, infer Dornbusch et al (2008) who define an adverse supply shock as; ‘one that shifts the aggregate supply
If a government finances an increase in its expenditures by selling bonds to the public, then the aggregate demand curve will: A. not shift. B. shift out more if crowding out occur
Aggregate demand in the cross model Because C and Im depends positively on Y while G, I and X are exogenous, aggregate demand Y D will depend positively on Y: Y D (Y) = C(
Does a firm's price equal marginal cost in the short run, in the long run, or both? Explain.
Suppose the Bank of Canada announces that it will raise the money supply in the future but does not change the money supply today. Using the Fisher equation, explain what happens t
production function
An engineer who was in the business of customizing software for small construction companies repay a loan that she got 3 years ago at 7% per year simple interest. If the amount she
Examine two (2) tenets of the mercantilist school. Determine whether you agree or disagree with these principles. Provide at least two (2) reasons to support your answer
What are the Responsibilities of central banks Responsibilities include providing banking services to commercial banks and the government and regulating financial markets and i
The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
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