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Suppose the money supply process is now represented by the following function:
where m measures the sensitivity of money supply with respect to the interest rate.
(i) Using this money supply specification, together with the money demand function in equation derive a new LM function and curve as L1M1; and,
(ii) Use this new LM function/curve together (and overlay or in the same diagram) with the IS and LM functions/curves derived in parts (a) and (b) of question 1 as I0S0 and L0M0 to explain and show quantitatively and graphically the relative efficacy of a cut of the income tax rate to 15%. Question
With the aid of the money market and the IS-LM fixed-price framework, model algebraically and graphically the key macroeconomic impact effects of an improvement financial payments technology.
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Each question, by default, should be solved INDIVIDUALLY, unless marked as \collaborative". Questions marked as \collaborative" implies that for those questions you are encourage
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An approximation to the error of a Riemannian sum: where V g (a; b) is the total variation of g on [a, b] de ned by the sup over all partitions on [a, b], including (a; b
Suppose that in the actual survey of 50 prospective customers, 6 subscribe to the 3 for all offer, what does this tell you about the previous estimate of the proportion of customer
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