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Real Exchange Rates (EXCH) is the next variable that will be analysed in this VAR. The reason for including exchange rates in the VAR is that they are an important channel through which the price of oil may impact upon economic activity.Another reason is that the UK exports crude oil worldwide therefore it may be possible to analyse the effects on domestic exchange rates should there be a change in the price of oil. The real exchange rate data uses Jan 2005 = 100 as the base.
Use the points on the graph below to answer the following questions. i) What is Ep along D1 (from A to B)? ii) What is the Ep along D2 (from X to Y)? iii) What are
Q. What do you mean by Wage inflation? We will develop the Keynesian model removing the assumption of fixed nominal wages. We state wage inflation p w as the percentage averag
Your firm usually uses about 200-300 tons of steel per year. Last year, you purchased 100 tons of steel than needed (at a price of $200 per ton) In the meantime, the price of steel
Determine the Long-term direct investment flows Long-term direct investment flows are when investors buy physical assets like land or capital equipment in another nation. This
After an oil price shock was impacted upon the other five variables in the model, many interesting results were found. I have already demonstrated that oil Granger causes i
Q. Show the Changes in the exchange rate? Assume that United States is our home country and the current euro exchange rate in direct notation is SD = 1.5 (euro/USD). In indirec
Why do some countries have a low real per capita income? Low real per capita income considers being largely due low productivity (i.e., output per worker) of low valued added
Determine the term- Nominal wages The nominal wage is wage per unit of time in currency used in the country- what we mainly just call wage. When we refer to wage in macroeconom
Potatoes cost Janice $1 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first pound of potatoes is worth $1.50, the sec
Desired Aggregate Spending Desired aggregate spending refers to the volume of purchases of the currently produced goods and services that all spending units in the economy wish
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