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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.
distnguish betweenNational income at market price and National Income at factor cost, explain the importance of the distinction
What is Inherent Limitation?
What is the difference in changing the scope between a spiral approach and a waterfall approach? Ans) The scope of needs changes in Waterfall model is less than that in Spiral M
How is the global social progress being measured today? Name some indicators of development progress that you believe reasonably reflect actual progress. What roles do corporate ci
a) Summarize the basic tenets of the arguments in this case. b) Do you agree with main tenets of the arguments in the case? Why? Justify your answer with detailed explanations. s
Sims (1980) introduced an exciting and ground-breaking new framework which would prove to be extremely insightful for macroeconomic analysis. This is known as vector autoregression
If the U.S. government were willing to convert dollars into gold at a fixed price, then dollars would be a. fiat money. b. commodity money. c. bank money. d. both fiat and
what is meant by diminishing scale output
Explain about the nominal Gross domestic product It isn't very common to use CPI in construction of real GDP. The reason is that CPI measures the price evolution of consumer go
illustrate and discuss the implications of variou market structures (competitive and noncompetitive) for price determination
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