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Furthermore it can be seen that there are interesting relationships between the remaining variables. Firstly, at the 95% significance level it can be seen that interest rates Granger cause exchange rates. This complies with the relevant theory as if domestic interest rates rise there will be a subsequent increase demand for domestic currency. The relationship between inflation and interest rates is also shown in Table 4.3, with both variables Granger causing each other.
In summary, this section has found that oil prices Granger causethree key macroeconomic variables, interest rates, inflation and GDP, therefore we are able to deduce that any unit change in the price of Brent oil, will subsequently impact on these three macroeconomic variables.
Expenditures and the Effects of Fiscal Policy are stated as follows: Having finished the discussion on the tax policy and taxation, now let’s us focus on expenditures and the e
short notes on absolute advantage
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Consider a market where supply and demand are given by QXS = -12 + PX and QXd = 78 - 2PX. Suppose the government imposes a price floor of $35, and agrees to purchase any and all un
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Note that it's changes in prices during 2008 that matter for the high real interest rate (time period when your deposit is earning interest). This means that you can never know how
Consider two consumers, A and B. A and B both want perfect consumption smoothing (c = cf) and both have no current wealth. However, the two consumers have different income streams.
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