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In the long-run framework, budget surpluses: A. should be run on a permanent basis since they boost saving and investment and stimulate economic growth. B. should be run whenever output dips below potential output. C. should never be run since they crowd out investment in the short run. D. are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment.
Explain the Exchange rate system in western world The most common exchange rate system in western world during previous century was the fixed exchange rate system. Up to 1930s,
Rational Expectations School Expectations on the future values of economic variables play an important role in macroeconomic analysis and economic analysis in general. Because
Gross Domestic Savings Income not devoted to current consumption is saved. In an economy during a particular year some units will consume less than their income while some wil
Why do financial crises occur and why are they so damaging to the economy?
2. Use the Quantity Theory of Money to explain inflation (a increase in the overall level of prices). (4 points) If you were a member of the Federal Reserve Board of the Governor
When a government spends more than it receives in taxes; it runs a budget deficit, which is generally covered by issuing debt obligations to domestic and/or international investors
the circular flow of income in an governed economy
discuss Haberler''s opportunity cost doctrine.
How do the five competitive forces in Porter's model affect the profitability of the overall industry? For example, in what way might weak forces increase industry profits, and in
Bayer Schering Pharma AG, Germany owns the Alka-Seltzer, which was launched in 1931 and was meant for relief of minor aches, pains, inflammation, fever, headache, heartburn, sour s
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