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Assume a floating exchange rate system. The Fed pursues an expansionary monetary policy. Draw how this would look on the graphs below. Mark the new equilibriums. Complete the table. Would the effects of this policy on the exchange rate help or hurt the goals of the Fed?
Q. Show the Isoquant touching axis? Isoquants do not intersect: By definition isoquants such as indifference curves, can never cut each other. If they cut each other it will
Lender of Last Resort The central bank also acts as the lender of last resort. Historically, this function developed out of the special position of the central banks. The centr
Disadvantages The effect on incentives High progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk
Shifts in the supply curve Shifts in the supply curve are brought about by changes in factors other than the price of the commodity. A shift in supply is indicated by an entir
Joe is evaluating the marketing strategy at his restaurant and inn. Suppose that in response to a $2.00 off sales promotion for spaghetti dinners, Joe finds that nightly dinner sal
factors influencing the demand for dove soap
Q. Relation between average cost and marginal cost? Relationship between MC and AC are the following: If MC is below AC then AC should be falling. This is because, if MC
1. Suppose in a perfectly competitive industry the market demand and supply forces combine to produce a short-run equilibrium price of Rs 70. Suppose that a firm in this industry h
Factors influencing Exchange Rates i. Inflation: Other things being equal, a country experiencing a high rate of inflation will experience a lower demand for its goods whil
PROBLEMS OF USING PER CAPITA INCOME TO COMPARE STANDARD OF LIVING OVER TIME 1) The composition of output may change. e.g. more defence-related goods may be produced and
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