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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.
What causes a supply curve to shift? a. Changes into Input Prices An input is a good which is used to generate another good. b. Changes into Technology c. Chang
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state the term fall in the exchange rate A fall in the exchange rate must make UK exports price competitive in international markets and increase demand for them. This should
Criticism of keynesian system
what is a wage? and the difference between real and nominal wages giving examples?
Explaining balance of payments: First, with the second oil shock of 1979-80 and doubling of India's import bill along with dismal export performance as result of severe
The aggregate demand curve shows the combinations of the price level and the level of output at which the goods and money markets are simultaneously in equilibrium. Let us now go o
Consider the Tuckman group stage process schema. Identify specific actions a manager can take at each stage of the process to best help a group reach the performing stage. Respond
a good is classified as inferior if a. consumers buy less when the price rises b. consumers buy less when the income rises c. consumers buy less when the price falls d.
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