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How central bank increases the target rate Let's say that the central bank increases the target rate. When the target rate increases, the central bank needs to raise the overni
Figure below demonstrates a more developed version of the circular flow. In this figure we see how goods flow through various sectors of the economy. Figure Money in the c
"No point is better accepted than the fact that the monopoly price is higher and the output smaller than what is socially ideal. The public is the victim." (a) Explain between
An investment promised a payoff of $195 two and a half years from today. At a discount rate of 75% per year what is the present value of this investment? A. 169.47 B. Not enoug
Determine Why banks raise their interest rates A way to explain why banks raise their interest rates is as follows. With higher overnight interest rates, it is more expensive fo
Use the model in the tax incidence application to determine the effect of a given change in the tax on widget, change in T, on the equilibrium quantity of widgets. How does your an
Q. Important points about the classic model? The most important points about the classic model are as following: Monetary and fiscal policy can't affect the GDP or unem
Explain the term- inventory investment We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciat
The following table contains data on the relationship between saving and income. Rearrange these data into a meaningful order and graph them on the accompanying grid. What is the s
Describe the Structural unemployment Individuals who are unemployed as their skills are no longer in demand where they live. This kind mainly results in longer spells and may r
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