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Problem:
Describe whether, the given statements (a-f) are True, False or Uncertain. Briefly justify our answer. Questions (g) - (h) show all your calculations. No marks will be allocated if you do not justify our answer.
(a) The flow of national income into domestic expenditure will be reduced by an increased savings.
(b) The Philips Curve shows the relationship between the rate of inflation and the nominal rate of interest.
(c) According to Purchasing Power Parity Theory, the comparative advantage of the two countries in terms of trade determines the rate of exchange between two countries.
(d) The LM schedule is always downward sloping.
(e) A reduction in the cash reserve ratio of the commercial banks, other things remaining unchanged would increase the value of the credit multiplier.
(f) A country imports only one commodity. After a devaluation of its currency by 10% its import falls from 50 million tonnes to 45 million tonnes. The elasticity of demand for imports is therefore equal to one.
(g) The table shows the price indices and weights for the three commodity groups that are included in the calculation of a country's cost of living index. The cost of living has increased by how much since the base year?
a) There is a general trade, and sometimes prominent as in case of UK, Canada, and Europe. When the tariff rates are showing an upward trend, the trade/GDP ratio is either declinin
Can a nation's economy grow larger over time? How?
Oligopoly is a marketplace where the deliver is controlled by a small group of companies. In this condition, the actions of single company will have a material effect on the whole
A government can finance its budget deficit by doing all of the following except: A. borrowing from its central bank. B. printing money. C. selling bonds. D. buying bonds.
Q. Show the analysis of cross model? We can divide our analysis of cross model into three sections: Aggregate demand. Aggregate demand is a major component of cross mo
take one set ( lk& output) to prove
Some scholarly papers have shown that growth from trade in developing nations can make the country worse. Can this happen? If so, describe the conditions required for this situatio
1. Kuhn - Tucker Conditions Max 2x + 3y s.t. pxX + pyY ≤ M. x ≥ 0, y ≥ 0 2. Max (8 + x)(8 + y) s.t. pxX + pyY ≤ M. x ≥ 0, y ≥ 0 Utility function 3. U(x, y)
Y= C+I+G C= 100,000000+ 0.4yd I= 400,00000 T= 0.2+60m G= 750, 000000 Calculate equilibrium level of income
Index number formulas
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