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Stocks and Flows When studying economics, one must be sure whether the variable being studied is a stock variable or a flow variable. Failure to do so can cause faulty economi
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. Explain about Price Inflation? The major reason for allowing for non-constant wages in the model is that we then can allow for persistent deflation/inflation. With constant
What is independent monetary policy Advantages: First, in a freely-floating exchange rate, the exchange rate must move down or up to correct a payments imbalance. Second, monet
Effects of consumption function.
whwt is the difference between the fixed accelerator and the flexible accelerator theories of investment?
The cash flows (CF t ) associated with an investment are listed below (assume that each cash flow occurs at the beginning of each year): CF 0 = -200
P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
what is meant by PPF?
Examine the graph below. The mayor has placed a $2 tax on the sale of each taco sold within the city. How large is the decrease in producer surplus?
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