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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 equal to nominal interest rate and we should use R = r + pe. Expected inflation pe is exogenous (even though not essentially constant. In more advanced Keynesian models you would find numerous assumptions on how expectations are formed.
Calculate the present value P at time zero and the corresponding future value F at the end of year three for a series of $15,000 payments to be made at the end of each of years one
The amount of wealth that households and business desire to hold in the form of money balances is called the 'demand for money'. Individuals and firms have at their command only
A firm sells its product in a perfectly competitive market where other firm charges a price of $90 per unit. The firm's total costs are C(Q) = 50 + 10Q + 2Q2. How much output shoul
c=100+0.8yd
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Equilibrium in the money market In the IS-LM-model, we have equilibrium in the money market when MD(Y, R) = MS This is the equation
Q. Define Nominal wages? The nominal wage is wage per unit of time in the currency used in the country- what we usually just call wage. When we mention wage in macroeconomics w
Q. Explain the labor market in the cross model? In cross model, both P and W are exogenous andconstant. Hence real wage is constant and it is not essentially equal to the equil
A government can finance its budget deficit by doing all of the following except: A. borrowing from its central bank. B. printing money. C. selling bonds. D. buying bonds.
a) There is a general trade, and sometimes prominent as in case of UK, Canada, and Europe. When the tariff rates are showing an upward trend, the trade/GDP ratio is either declinin
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