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Q. Relation between nominal and real interest rate?
Relation between nominal interest rate, real interest rate and inflation
If we signify the nominal interest rate by R, real rate by r and expected inflation by pe then real interest rate is defined by:
r = R-pe or R=r+pe
Introduction of labour market A vital macroeconomic variable is the total amount of labor which is used in a certain time period. Amount of labor and amount of capital are sig
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Liberalisation and Changing Sectoral Composition of FDI: The latest is the ICT wave that has influenced the global shift in service industries the most. Therefore, these flow
Determine Why banks raise their interest rates A way to explain why banks raise their interest rates is as follows. With higher overnight interest rates, it is more expensive fo
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Because the structure of the personal income tax is progressive, a larger share of income is taxed at higher rates as real income increases. Therefore, economic growth automaticall
Suppose that the desired capital stock is given as: K* = 0.3Y/i r Where Y = GDP, and i r is the real interest rate. Suppose further that Y = $5 trillion and that i r
what is the supply side
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Gross Domestic Savings Income not devoted to current consumption is saved. In an economy during a particular year some units will consume less than their income while some wil
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