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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.
Question 1: Critically analyse the costs of inflation. Which of these items is likely to have encouraged many governments in their adoption of inflation as public enemy number
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Assume that the required reserve ratio is 0.12 for deposits & there are no excess reserves. Assume that the total demand for currency is equal to 0.3 times deposits. a) If t
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