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The demand for nominal balances rises with the price level. At the similar time inflation causes the real demand for money to fall. Describe how these two assertions can be both correct.
Present a brief exposition on the quantity theory of money. Recognize the assumptions associated with it and interpret them.
Describe the relationship between money supply, velocity of circulation, price level and volume of economic transaction.
Discuss the significance of the constancy of velocity of circulation of money.
If the price level depends on both the current money supply and future expected money supplies, in order to stop a hyperinflation, a central bank may try to establish credibility b
factors affecting national income
The events X and Y are mutually exclusive. Suppose P(X)=.05 and P(Y) =.02. What is the probability of either X or Y occurring? What is not probability of X nor Y happens?
Camping at Wilson's Promontory, a national park in Victoria, isn't free, but for many years now not everyone who wants to camp at Wilson's Promontory during the Christmas holidays
Explain about the short term and long term interest rate in money demand. The Opportunity Cost of Holding Money Demand: a. Short-term interest rates Rates onto assets whi
a small country produces 5000 units of output and has a money suplly of $2000. if citizens want to hold 10% of their income in money ie k=0.1 what are v, $gnp, p and real money sup
There are three firms in an economy: A, B, and C. Firm A buys $450 worth of goods from firm B and $260 worth of goods from firm C, and produces 260 units of output, which it sells
Give a brief description of the transmission mechanism 1. When the central bank target rate increases, other interest rates in the economy will increase (and the money supply
Q. Describe Exports and imports in AS-AD model? Exports and imports. This is more difficult to justify owing to exchange rate. Suppose that we have a flexible exchange rate a
Compare Classical economic theory to Keynesian economic theory. Which approach, if either is the US currently applying and what have been the effects of such policies?
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