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Q. Using a figure illustrate the simultaneous equilibrium of the foreign exchange and domestic money markets when the exchange rate is fixed at E0 and is expected to remain fixed at E0 in the future. Assume both P and Y is constants. Now, study the effect of an increase in income, Y.
Answer: The L(R*, Y) will shift down as well as to the right, which will require an increase in M to M2. This will necessitate the domestic central bank to purchase foreign assets and thereby increase the money supply leaving E at E0. Note that R = R* at the new balance as before.
What will be the effects of an increase in real national income on the interest rate? Answer: An enhance in real national income will increase the interest rate. If investment
Hepburn’s Speed Model, the coefficients of vehicles are indicated for C and D. As the chief of operations in your organization, you are responsible for presenting the yearly budget
Application of defferential calculus in economics
Using examples, from the government, illustrate the significant opportunity cost.
organistion and style of writing the research report
Argus Savings and Loan Association began in 1956 in Hometown. As is typical of savings and loan associations, Argus accepts the savings of individuals and organisations and uses th
Q. "The line distinguishing between external and internal goals can be fuzzy." Discuss. Answer: True For instance employment target for export industries when export growth m
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Q. Should the IMF be abolished? Discuss. Answer: Arguments for eliminating the IMF must mention moral hazard and insistence on high interest rates and hasty structural
Q. "Trade liberalization could precede capital account liberalization." Discuss. Answer: It is probably true. The issue is associated to the theory of second best and
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