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Question 1:
i) Is there a stable and inverse link between unemployment and inflation?
ii) The government announces that expansionary policies will be enacted in a view to reduce unemployment. Use Friedman's adaptive expectation framework to show the effects of such policies in both the short run and long run.
Question 2:
i) Describe why the government should make provision of social goods. Briefly describe these goods.
ii) What do you meant by negative externalities? Examine the different means that a government can use to tackle these problems.
Question 3:
Write on any two of the following. (Each part carries equal marks).
i) Public sector borrowing requirement ii) International fiscal coordination. iii) Direct versus Indirect taxes.
What is triangular arbitrage? What is a condition that will give increase to a triangular arbitrage opportunity? Answer: Triangular arbitrage is the method of trading out of th
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Explain how Eurocurrency is created. Answer: The center of the international money market is the Eurocurrency market. A Eurocurrency is a time deposit of money in an internationa
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