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Numerical Exercise 11. Suppose that the Fed’s inflation target is 2 percent, potential output growth is 3.5 percent, and velocity is a function of how much the interest rate differ
Question 1 Explain the law of diminishing returns. What are its causes and effects? Question 2 Compare perfect and imperfect markets Question 3 A monopolist with a linea
Define the aggregate price level in the macroeconomics. Aggregate Price Level: A nominal measure is a measure which has not been adjusted for modifications into prices
Question 1: What are the main predictions of the Capital Asset Pricing Model (CAPM)? Discuss the role and significance of the assumptions needed to obtain the predictions.
Things like housing and autos tend to be affected by changes in interest rates due to financing is typically needed to make such purchases. If financing becomes more costly due to
What are the predictions of dependency theory? The predictions of dependency theory: • DCs exploit LDCs (Less Developed Countries) by extracting their surplus value. Surplu
QUESTION 1 (a) Explain the meaning of asymmetric information, adverse selection and moral hazard and their implications on the role of commercial banks in the financial interme
How can trade Liberalisation mean eliminating barriers? Trade liberalisation is the removal of trade restrictions for example tariffs, quotas and non-trade barriers is unsynch
What are development policies? Development policies are strategies adopted through governments, international agencies as like the IMF and non-government organisation (NGOs) a
Explain the state intervention approaches for promoting development. State intervention can result within: • Large bureaucracies staffed through friends and relatives of the
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