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Q. What do you mean by Capital Flows?
With free capital flows, this is a very unreasonable assumption. If we domestic interest rate increase against the foreign interest rates, capital will flow into our country that would drive down the domestic interest rate again.
Most reasonable models in that domestic interest rate is affected by foreign interest rates are more complicated. To understand such models, you should first understand models where this complication doesn't arise. Additionally predictions from models where domestic interest rate isn't affected by foreign interest rates are fairly similar to more realistic models which allows for capital flows.
State the macroeconomic policy The view that macroeconomic policy must only focus on supply-side performance of economy and should ignore management of the demand side is an ex
Q. Explain the basic characteristics of IS-curve? IS-LM diagram IS-curve The IS curve shows all combinations of R and Y where the goods marketis in
The monetary system in any economy facilitates trade and allows people to trade more efficiently, as compared to a barter economy. In the United States, the monetary authority is t
In the short run, the discrepancy between actual and expected price level causes changes in output and employment. But in the long run, if all other things remain constant, the hig
The LM curve with inflation We know that LM curve will shift upwards when P increases (presuming MS is constant). This is still true though we can also add that LM curve glid
ihave real gdp per capita for all countries in world .. how can i calculate world real gdp per capita by using the data.
Determine what is the yield curve The yield curve is a graph of interest rates of different maturity (recalculated to yearly rates) at a particular point in time. It is common
The following Cobb-Douglas production function is used to describe the output generated by a local government maintenance agency. Q = αL β1 K β2 E β3 Where L represents numb
WHAT IS THE BEST EXCHANGE RATE TYPE
y=vk ?k=s*f(k)-(?+n)k saving rate 28% population growth of 1% Have y persistent size s, n, g and ?function
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