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Interest Rates (R) - I feel that it is important to include a variable which represents the monetary sector of the economy because those inflationary pressures which are expected to be present post oil price shock are likely to impose pressures onto the monetary demand in the economy. Therefore Interest Rates (R) will be incorporated into the VAR model. From this we cannot examine monetary policy, due to the features of the VAR model. However we are able to observe changes in the rate of interest following an oil price shock.The Interest Rates statistics are calculated as the mean average throughout each quarter.
Q. Consumption function in the IS-LM model? The consumption function will be the same as in cross model, consumption will depend positively on Y. In the classical model, consum
Can the federal government go bankrupt? Explain.
Which of the following is a result of an export subsidy? a. The imposing nation always benefits from an export subsidy. b. The imposing nation suffers a terms of trade loss from an
tax be cut as the main policy target
Suppose that a grocery store buys milk for $2.10 and sells it for $2.60. If the milk gets old then the grocery store can sell their unsold milk back to their wholesaler for $0.60 (
Exchange Rate Management: Following two stage devaluation of the Indian rupee in quick succession in July 1991, the government introduced Liberalized Exchange Rate System
The total cost C of producing x units of some commodity is a linear function. Records show that on one occasion, 100 units were made at a total cost of $200, and on another occasio
You operate your own small building company and have decided to bid on a government contract to build a pedestrian walkway in a national park during the coming winter. The walkway
Determine about the gross domestic product Growth By (nominal) GDP-growth we mean % change in (nominal) GDP over a particular period of time. Real GDP growth is stated as perce
What impact will an unanticipated increase in the money supply have on the real interest rate, real output, and employment in the short run? How will expansionary monetary policy a
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