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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 co
Describe in short about Money "Money" in economics is actually not as simple to understand as you may think and many use the term money in a way inconsistent with how it's defi
suppose that a persons wealth is kshs. 50,000 and her yearly income is kshs. 60,000. suppose further that her money demand function is given by Md = y(0.35-i) where i= interest
Despite the economic progress that the U.S. has observed in the past century, the standard of living remains extremely low in many countries. Why are some countries relatively weal
what is the importance of the quantity theory of money
In 2010, Forbes magazine listed Bill Gates, the founder of Microsoft, as the richest person in the United States. His personal wealth was estimated to be $53 billion. If there were
Determine the main target of monetary policy Since 1997 'official' main target of monetary policy has been to 'hit' inflation rate target set by government. Though since the o
A significant argument for the augmentation has to do with concept of money illusion. Money illusion means that you care about nominal rather than real amounts. Imagine that your s
explain circular flow of income in an open economy
The following is the information from the national income accounts for a hypothetical country: GDP Rs. 6000.00 Gross Investment Rs. 800.00 Net Investment Rs. 200.00 Consumption Rs.
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