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Q. What are the main factors determining the aggregate money demand?
Answer: Three major factors: the price level, interest rate and real national income. A increase in the interest rate causes each individual in the economy to reduce her demand for money. If the price level increases, individual firms and households will spend more money than before. When actual national income (GNP) raises the demand for money will rise.
What is trade under decreasing opportunity cost?
Using 4 different figures, plot the time paths showing the effects of a permanent increase in the United States money supply on: A. U.S. money supply. B.
(a) Consider there are two countries (country 1 and country 2) with two goods (X and Y). Further, under the assumptions of the Ricardian model, country 1 specialise in goods X. De
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Importance of International Trades : The basis of international trade is to be found in the diversity of economic resources in different countries. All countries have not been end
Q. It can be demonstrated that any protectionist policy, which effectively shifts real resources to import competing sector or industry, will harm export industries or sectors. T
Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
Q. Explain the advantage a and disadvantage of globalization? Advantages - 1. Economic growth 2. Lower cost 3. Improved availability of goods and services 4. Glob
Q. Explain why the European Union's current combination of rapid capital migration with limited labor migration may actually raise the cost of adjusting to product market shocks wi
I need to use the gravity model to analyse the effects of the euro on tradeflows. is this something u can do?
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