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Components of Balance of Payments The BoP statement is usually divided into three major groups of accounts. These are: i.The Current Account: This account records the imp
Consider the impact of an increase in thriftiness in the Keynesian-cross analysis. Assume that the marginal propensity to consume is unchanged, but the intercept of the consumption
Q. How to evaluate total savings? Total savings Total savings S(r) depends positively on the real interest rate Remember that total saving
How can we determine fixed exchange rate If a nation has a fixed exchange rate (say against a specific currency), the government or central bank may change this fixed exchange
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
Differentiate between Nominal rate and real interest rates To distinguish the real interest rate from the "normal" interest rate, the latter is called the nominal interest rate
You decide to buy a home for $1,000,000. You approach two banks for financing. The first requires a 10% down payment and requires monthly payments on a 20 year mortgage sufficient
Determine the term- GDP per capita GDP, being a flow, isn't a measure of the total wealth of a country though a measure of the "income" of country during a certain period of ti
Suppose three identical firms are engaged in Cournot competition in quantities. They all have marginal costs equal to 40. Market demand is given by: P(X) = 200 - X = 200 - (x
#C=100+0.8yd G=100 T=0.25y X=150 M=0.25yd 1) What is the level of equilibrium national income? 2) Estimate the budget surplus or deficit at the equilibrium national income. 3) Deri
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