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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.
Suppose a company is considering two independent projects, Project A and Project B. The cash outlay for Project A is $14,000. The cash outlay for Project B is $20,000. The company
Can i have a guide on a particular macroeconomics assignment? I have totally no idea on how to start it. Please reply and i will show the question.
A recent study in NJ showed that 50% of all patients will return to the same dentist. Suppose nine patients are selected at random, what is the probability that: (a) exactly five o
how useful is national income statistics for indicating living standards
GDP vs GNP in kenya
The Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price
Suppose that Ana is buying only 2 goods: good 1 and 2. If the price of good 1 doubles and the price of good 2 drops by one third, then what happens with the budget constraint? (Ass
Suppose Zippy's Banana Juice can produce according the following long-run production function. Q = 5 L 2 + 20 K - 0.4 K 2 where Q is gallons of juice per hour, L is labor hours,
An electronic chip is to be implanted in the body. During in vitro (in the lab) testing it is observed that the chip will dissolve over time if exposed to liquid with similar pH to
Explain demand management of Keynesian economists The demand management of Keynesian economists of 50's and 60's is attacked by free-marketers for ignoring the importance of s
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