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what effect would a rise in the velocity of money have on output, employment and price level?
Ok... So if the price level is rising, this means that inflation is rising as well, so the value of the dollar in the US would decrease meaning that purchasing power decreases as
Suppose that the desired capital stock is given as: K* = 0.3Y/i r Where Y = GDP, and i r is the real interest rate. Suppose further that Y = $5 trillion and that i r
In 2007, based upon the Survey of Household Spending of 2005, Statistics Canada announced the following weights for the major spending categories tracked by the CPI.
In order to observe the correlations between each variable, the most effective method to use is Vector Autoregression (VAR). VAR estimation uses a system of simultaneous equations
What is Cost-push inflation Cost-push inflation takes place when costs of production increase causing short-run aggregate supply curve to shift to left. The main causes of c
Assume in country-A Central Bank cares only about keeping the price level stable & in country-B, its central bank cares only about keeping output & employment at their natural rate
Assume that there are only two inputs (labor and natural resources) producing two goods (movies and gasoline) with no improvement in society's technology over time. Further, assume
Sims (1980) introduced an exciting and ground-breaking new framework which would prove to be extremely insightful for macroeconomic analysis. This is known as vector autoregression
Q. Money market with inflation and constant money supply growth? If π M = π and π e = π, both IS- and LM-curve will be fixed. Figure: The money market with inflatio
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