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P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
Q. Nominal interest rate and expected inflation? When we have inflation, we can't, of course, presume that expected inflation is zero. So real interest rate will no longer be e
what are the purposes of taxation
Use a diagram of the open economy model (e.g. fig 32.4 from the text) to illustrate and explain the effect of the following event on the market for loanable funds, the level of net
It refers to the study of feasibility of a project in terms of its total economic cost and total economic advantages. It means to compare total cost with total advantage if we
factor for long run trend of term of trade
The Pigou effect: A) suggests that as prices fall and real money balances rise, consumers should feel less wealthy and spend less. B) suggests that as prices fall and real mo
examine keynesian theory of un employment
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 t
Suppose that the market labor supply and labor demand equations are given by Qs = 5W and Qd = 30 - 5W. If a minimum wage is set at $4.00 (W = 4), then how all step by step.
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