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Business Cycles
Economic growth is not a continuous process. Superimposed on the long-term trends are short-term fluctuations in the levels of economic activity and\or in growth rates. These upswings and downswings are of varying duration and intensity and are referred to as 'cycles'. Governments attempt to smooth out these fluctuations with the use of contra-cyclical monetary and fiscal policies. The latest developments in macroeconomic thought regard business cycles as the central (if not the only) problem of macroeconomics.
c=100+0.8yd
The hypotheses are: The null hypothesis, infers that a unit root exists, whereas the alternative hypothesis, concludes that there is no root. Decision rule:
Explain the adjustment to the new equilibrium price from an increase in demand.
HOW CAN CENTRAL BANK INFLUENCE THE STABILITY OF THE BANKING SYSTEM?
Illustrate the circular flow of income and expenditure according to their models ( classical and keynesian)
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