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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.
Crowding out is associated with: A. an increase in business investment resulting from an increase in government borrowing and higher interest rates. B. an increase in private savin
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1 . Use the AS/AD model to a . Demonstrate graphically and explain verbally the situation the US economy is currently in. b. In the diagram you drew for part (a) above, sh
"Subsidizing the price of milk or other agricultural products is not very expensive considering how many consumers there are in the United States. Therefore, there is little harmfu
Q. Equilibrium in the labor market? Equilibrium in the labor market Real wage W/P will be equal to the equilibrium real wage in the classical model
Q. Show the example on IS-curve? Figure We can explain this argument with the above figure. 1. Start by identifying R 1 and R 2 in lower graph. 2. Draw aggr
Q. Model of labor market in AS-AD model? Remember the model of labor market in AS-AD model with constant wages. On the y-axis, we had real wage and on x-axis, we had L. The res
During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use supply and demand diagrams, how the following markets are affected in terms of pr
using a classical labour market , illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage. what will eventually happen in this lab
How does an increase in income affect a consumer's budget line and their total utility?
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