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Q. Using a figure, show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run.
Answer: A temporarily monetary expansion will move the economy from DD1 to DD2 and output increases. A permanent financial expansion will as well shift the AA curve to the left and down. The small exchange rate appreciates that is E decreases.
theory of opportunity cost?
Q. What is the national income identity for an open economy? Answer: Y = C + I + G + EX - IM.
In this year, the Bank of Canada raised the target for overnight rate consistently and continuously. The rate changes are as follows: Date Target (%)
Q. What factors lie behind capital inflows to the developing world? Answer: Several developing countries have received a lot of capital inflows that lead them to an
what you do understand by the term effective rate of protection
"1. Describe the important benefits enjoyed by Indian companies through TRIPs. Elaborate the main objectives of WTO in global economy. 2. "Leontiff paradox is proved in th
Q. Suppose E is fixed at E 0 and that the asset markets are in equilibrium. Suddenly output rises. What monetary measures keep the current exchange rate constant given unchanged e
Q. Why did the EU countries move away from the EMS toward the goal of a single shared currency? Answer: 1. To produce a superior degree of European market integratio
Q. Explain the following figure: Answer: The figure depict the effect of a permanent increase in the money supply starting from full employment equilibrium. Subsequent to the i
distinguish between net terms of trade and gross terms of trade
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