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The problem with the Keynesian model We can classify two problems with the Keynesian model as developed so far: 1. Π is exogenous. Although inflation may temporarily deviate
determinants of money supply
Q. Central bank overnight interest rate? Overnight interest rate is a significant interest rate for a central bank and it has methods of influencing this rate. In most nations,
Monetary Policy Vs. Fiscal Policy According to monetarists, money is very important in determining the level of aggregate demand and that monetary policy is very potent. In con
Q. Production function and Growth? From the simple production function Y = f(L, K), we can classify three sources of growth: An increase in L. An increase in K.
ACCOUNTING SYSTEM-EXAMPLE IV Now consider the economy as in example III. In the next year same outputs were produced and the same incomes were paid out. However, the household
Using the equilibrium in the labor market and the model IS-LM explain the different behavior described by the classic and keynessian schools when there is an increase in public spe
Q. Show the AD curve over time? With inflation, AD curve will no longer be stable over time. In its place, it will glide upwards or downwards at a rate determined by growth rat
Suppose you buy call options on Microsoft stock. Each option costs $2 and has the strike price of $40 and the expiration date July 1. Discuss whether you would exercise the options
The economy of Mainland has the following aggregate and aggregate supply schedules: Real GDP Demanded Real GDP Supplie
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