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Q. Discuss the effects of ongoing inflation based on the PPP theory. Answer: Other things equivalent money supply growth at a constant rate eventually results in ongoi
how is it the economy during the two wars and till 20 th
Q. Explain how an increase in government spending would affect the DD-AA schedule in the short run. Answer: A raise in government spending will raise aggregate demand, which wi
Postwar trade theory
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Q. What are the main functions of money? Answer: Money serves generally three important functions that are a unit of account, a medium of exchange and a store of value.
Q. Use the DD - AA model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in foreign demand for its exports.
Q. If the central bank does not purchase foreign assets when output increases but instead holds the money stock constant, can it still keep the exchange rate fixed at E 0 ? An
Q. What are the predictions for the long run of the Monetary Approach? Answer: Money supplies- Known the equations E $/E = P US /P E P US = M S US /L(R $
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