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With the aim of this project to observe the impact of oil price shocks on macroeconomic indicators, testing for causality between these variables will establish whether or not, oil price changes explain changes in other variables. To carry this out, the VAR/Block Exogeneity Granger Causality Test will be performed. This test will estimate whether the oil price variables will Granger cause the remaining variables in the equation. This is achieved by analysing the p statistic at the relevant significance level. In addition to this, pairwise Granger Causality tests will be estimated. This is when each variable is tested purely against another to see whether one directly Granger causes the other.
Q. Explain the classical growth theory? Production function won't provide us with a theory or explanation of growth. It's only a convenient tool that helps us breaking down gro
Neo-classical synthesis is a synthesis of classical model and Keynesian model. In brief, it states that Keynesian model is correct in the short run whereas the classical analysis i
Give brief Introduction about Interest rate When you borrow money, you usually have to pay a fee for the loan. This fee is often called interest, particularly if the fee is pr
What are the three methods that societies have used to allocate their scarce resources? Give an example of each method. Give an example of a good that uses all three methods at onc
How does an increase in income affect a consumer's budget line and their total utility?
(40 points) Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different inc
Your project has an estimated cost for land reclamation to be realized at the end of 20 years from today for $70,000,000. If current bond long-term interest rates are 7% compounded
Researchers have put forth various theories to explain the observed widening of the income distribution in the United States over the past four decades. First, there has been a sh
circular flow of income in a single sector,two sector,three sector and four sector
The benefits of capitalism are that the governments have limited control over other business, which lets business compete.
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