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However, these results should be approached with due caution. The limitations and problems associated with VAR modelling have been outlined in this paper, therefore these observati
Economists estimate the short run elasticity of demand for a Chipotle burrito is -2.25. i) What degree of elasticity does Chipotle burritos exhibit? ii) A 1% change in
Illustrate the statement - Currency inside banks is not money The fact that currency inside commercial banks is not money may strike you as odd, but it is an important principl
Explain the economy automatic stabiliser A budget deficit is shortfall between a government's tax revenue and its spending in a given year. If a government runs a budget defici
) Consider an economy where individuals live for 2 periods and have prefer- ences represented by ln(c) + ß ln(c') where c and c' represent consumption in the first and second perio
In the view of above complications, there is a long-standing debate on whether the fiscal policy should be active or passive in nature. Note that in the Keynesian context; even a p
Relation between nominal interest rate, real interest rate and inflation If we denote the nominal interest rate by R, the real rate by r and the expected inflation by p e then
Christina Romer and Jared Bernstein in "The Job Impact of the American Recovery and Reinvestment Plan" calibrated the impact of the proposed expansionary fiscal policy (we know it
Is it true that government revenues are increased because of lower tax rates? Ans) It is true to a point. The Laffer curve determines that revenues enhance as the tax rates rise
Q. Show factors that govern the Price Elasticity of Demand? a. The number and closeness of the substitutes- The more and the better the substitutes, the grater is the Price Ela
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