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Suppose the Bank of Canada announces that it will raise the money supply in the future but does not change the money supply today. Using the Fisher equation, explain what happens to the nominal interest rate.
Usually the government is very good at wasting money and resources so less spending, by the government helps the economy as those resources are allocated in areas that are more wel
Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for ea
Explain why we cannot measure the national product simply by adding up the production of all firms. Why do the economists use real GDP rather than nominal GDP to gauge economic
Which of the following investments has a larger future value: Investment A an $1,000 investment earning 5% per year for 6 years? Or Investment B a %500 investment earning 10% per y
As is the case with the supply and demand function for a single business firm determining the equilibrium price and output for its product, the aggregate supply and aggregate deman
DIFFICULTIES IN MEASURING THE NATIONAL INCOME There are some conceptual and statistical problems in measuring national product. Some items are excluded from the national incom
Index number formulas
In a city of 120,000 people there are 20,000 Norwegians. What is the probability that a randomly selected person from the city will be Norwegian?
Statics and Dynamics Economic models deal with stock and flow variables. These variables can be in one of the two states - equilibrium or disequilibrium - at a particular poin
Q. Explain about Interest rate? When you borrow money, you normally have to pay a fee for the loan. This fee is frequently known as interest, especially if the fee is proportio
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