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Assume the marginal propensity to consume = .8, and government purchases increase by $.2 Trillion. 1. Potentially, how much will real GDP increase in the short-run after the inc
If the reserve bank wants to pursue a contractionary policy, what should it do?
Determinants of Money Supply The preceding sections concentrate on the processes through which the commercial banking system creates and destroys deposits by purchasing and se
Why law of demand does not hold in pakistan
Define the monopoly of Central banks The central bank has a monopoly on issuing currency, it is in complete control of the monetary base. In section 7.4.2 we will describe exac
At first, it may seem obvious that consumption will rely on Y. If GDP is doubled in real terms over a number of years, government consumption, private consumption and investment wi
Q. Define Effective exchange rate? Suppose that we are interested in external competitiveness of a country, let's say Japan. To do this we could look at evolution of a particul
For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annu
Assume that the economy is characterized by the following structural equations: C = 160 + 0.6 (4 - T) I = 150; G = 150; T = 100. a) Determine the equilibrium output level
Compare Money with wealth and income Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real estate). An
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