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Over long spans of time, macroeconomies typically grow, but over short spans there are fluctuations in output and prices known as ____ ?
Assume that the required reserve ratio is 0.12 for deposits & there are no excess reserves. Assume that the total demand for currency is equal to 0.3 times deposits. a) If t
What are the advantages of leaving resource allocation to price allocation? Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Dimin
:- Consider a closed capitalist economy in which all productions is undertaken by100 firms and wages and profits are theonly 2 categories of incomes. Assume further that all wages
Q. What do you mean by Capital Flows? With free capital flows, this is a very unreasonable assumption. If we domestic interest rate increase against the foreign interest rates,
Definition of Money We should define what we mean by money. Money has a long as well as interesting history and an understanding of how we came to use money is useful for any
Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook y
Q. What is IS-LM model with inflation? The IS-LM model with inflation The basic assumption We developed IS-LM model with constant wages and prices. We can now exten
What is independent monetary policy Advantages: First, in a freely-floating exchange rate, the exchange rate must move down or up to correct a payments imbalance. Second, monet
Economic functions of money - A medium of exchange This is its most important role. Without money we would live in a barter economy where we would have to trade goods and
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