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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.
If the U.S. government were willing to convert dollars into gold at a fixed price, then dollars would be a. fiat money. b. commodity money. c. bank money. d. both fiat and
Factors Responsible for changes in Aggregate Supply We know that changes in input costs such as wages, oil and other input prices will cause changes in aggregate supply. Most
What do you mean by Gross Domestic Product? Gross Domestic Product: GDP stands for Gross domestic product, measures the value of all concluding goods and services produce
exam notes of national income accounting
QXd = 14 - (1/2)PX and QXs = (1/4)PX - 1 Instructions: Round your answers to the nearest whole number. a. Determine the equilibrium price and quantity. Show the equilibrium g
THE MODEL BUILDING A model of individual or aggregate economic phenomena represents a simplification of real world economic complexities. It may be expressed in words, ta
1. An unemployed individual decides to spend the day fishing. The opportunity cost of fishing is equal to A) The cost of bait and any other monetary expenses. B) Zero, becaus
# ???? .. difference between gdp at market price and nnp at factor cost
The short-run supply of a certain crop is perfectly inelastic, because it has already been harvested and no more of it can be grown until the next growing season. In order to raise
Sustainability of Current Account Deficit: Theoretically speaking, a current account deficit can be sustained as long as the growth rate of national income exceeds the rate of
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