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Explain about the circular-flow of economic activities. Circular-Flow of Economic Activities: Economic Agents: a. Households b. Firms Where they interact:
1. Should each person behave in the workplace the way they do at home? Or should each person have a separate set of ethics for each part of their life? 2. What if you are the bo
If banks expect an unusually large increase in withdraws from checking deposit accounts in the near future, what would happen to the federal funds rate, borrowed reserves and nonbo
Q. Define Effective exchange rate? Suppose that we are interested in external competitiveness of a country, let's say Japan. To do this we could look at evolution of a particul
Which is a better measure of economic well-being real GDP or Nominal GDP? Ans) Well real GDP takes into account the inflation rate and therefore is more accurate at recording th
Suppose that Mr. Chauncey Gardener consumes two goods, X 1 and X 2 .His preferences can be described by the following utility function: U = X 1 0.5 X 2 0.5 He
Assume that an economy's GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function is represe
Balance of Payments All countries have economic transactions with other countries. These consist of import and export of goods and services, official and private gifts and don
If the reserve bank wants to pursue a contractionary policy, what should it do?
A system of private property rights A. enhances economic growth by creating incentives to the Fed to maintain stable prices. B. enhances economic growth by increasing the pro
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