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Basic textbook models, such as the Mundell-Fleming model, say that capital inflow happens due to the domestic interest rate being higher than the world interest rate, and therefore capital inflow. So according to this model, it can lower interest rates so that interest rates stabilize to the world interest rate. Though, there is a checklist that requires to be ticked off and this checklist is like a chain, for example if domestic interest rates are high then there is going to be capital inflow, the domestic money will appreciate due to the enhance in demand for the currency, therefore Net Exports will decrease until exchange rates have stabilized.
Neo Classical vs Keynesian School We know that Keynesian economics was propounded as a revolution against the then prevailing orthodoxy of the classical school. In time,
Controller of Credit The principles of credit control by the central bank were discovered and enunciated after the publication of Bagehot Lombard street in 1873. Even after 187
WHAT ARE THE FORMS OF COST FUNCTIONS?
Demerits of direct taxes a. Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to productivity by encouraging absenteeism
Search and Matching Model It should be clear to you fiom the earlier section that there are a variety of models under the rubric of search theory. In this sec
Can identity economics explain some patterns observed in the Australian economy
Determine a Specific Price of demand of product A proclamation concerning the demand of a product without mentioning its price is worthless. For instance, to state that demand
Cross-elasticity is the measure of responsiveness of demand for a commodity to the changes in price of its substitutes and complementary goods. For example, cross-elasticity of dem
Q. Explain about Time series analysis? An analysis of relationship between variables over a period of time. Time-series analysis is helpful in assessing how an economic or othe
Q. Causes for diseconomies of scale? The most significant cause for diseconomies of scale is the diminishing returns to management. As the output grows beyond certain level the
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