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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 will decrease, but that is not important here).
2. With higher interest rates, it is more expensive to borrow and more advantageous to save. Therefore, consumption and investment will decrease (we say that the central bank "cools off" the economy).
3. As consumption and investment fall, GDP is reduced and unemployment will rise. This will cause inflation and the growth rate in wages to fall.
Explain how inflation unemployment trade-off is not feasible under adaptive expectation.MEC002
The employment-population ratio gives the number of people: Select one: a. working. b. working as a percentage of the number of people available to work. c. in the labor force.
The demand for money schedule shows that the quality of money that people want to hold
Enumerate the statement- Interest rates with longer maturity Since loans with longer maturities are substitutes for overnight loans, the central bank also has some control o
discuss approach to organizational design
factor for long run trend of term of trade
What is banking?
Q. Describe about Components of GDP? By considering all arrows to and from the goods market we see that Y + I m = C + I + G + X. Left hand side is the value of all finishe
Recognize which of the following purchases is counted as a part of NI: a) Tata motors purchases tire from Good year to equip latest Indica. b) Tata motors purchases tires fr
mundell-Fleming Model
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