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Q. Explain how a rise in real income affects aggregate demand.
Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases the spending on imports IM therefore lowering the current account CA and reducing aggregate demand AD. Though, the rise in Yd as well causes a rise in consumption C and increases aggregate demand AD by more than the corresponding diminish.
Q. What can one learn from the following figure? Answer: The figure shows the U.S. current account as well as net foreign wealth from 1977 until 1996. It illustrate that a
Q. The Specific Factors model makes a distinction between general-purpose factors that can move between sectors and factors that are specific to particular uses. How do difference
Q. Discuss studies based on the interest parity conditions. Answer: Generally the formula doesn't hold and isn't a good predictor of future devaluations. Even poorer it
what are the limitation of comparative advantage?
Explain the law of demand. Briefly discussed the exception to the law of demand
Q. Discuss the benefits and costs of joining a fixed-exchange area. Answer: Benefits generally gains from the stability of the area and reduced uncertainty. The compete
een subject to a discrimination complaint as a result of their recent recruitment campaign- They told the recruitment agency that they were looking for ‘young women with flair'' to
what is this all about
Is a depreciation of the dollar/euro exchange rate correlated with a decrease in the dollar return on U.S. deposits? Answer: No, suppose that the Interest Parity is maintained
I am writing a paper on dependancy theory in Ghana and I am having trouble understanding the basics of peripheral capitalism.
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