Economy were an open economy with a flexible exchange rate

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Reference no: EM1319508

Q. a. During the resulting multiplier process Illustrate what two things happen to the interest rate?

b. If this economy were an open economy with a flexible exchange rate, would the usual crowding out forces be supplemented or offset
by forces from the international sector? Elucidate in detail by using a flowchart.

c. Elucidate, with the aid of an example, Explain why under a fixed exchange rate Canadian monetary policy is determined by the United States.

d. Elucidate Illustrate what discouraged workers are also Elucidate how they could give rise to paradoxical movements in the unemployment rate.

e. Illustrate what is the main cost of a successful wage-price controls program? Illustrate what are its main benefits?

f. Explain why does the short-run Phillips curve have a kink also Illustrate what (also Explain why) is the main policy implication of this kink?

g. ‘Indirect taxes such as the Canadian GST Taxes haven't got anything to do with the actual cost of producing goods, but yet are counted as part of the GDP ‘. Is this statement true or false? Elucidate Explain why?

Reference no: EM1319508

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