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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.
Q. Aggregate supply in AS-AD model? In order to figure out all the variables in AS-AD model, we need one more equilibrium condition so that we can identify a unique point on AD
In order to encourage you to take interests in the current affairs in business, and have more concerns about the real world problems (which is what economics is about), you are req
Q. Show the example on IS-curve? Figure We can explain this argument with the above figure. 1. Start by identifying R 1 and R 2 in lower graph. 2. Draw aggr
The NJ Bureau of Employment gathered the following sample information on the number of hours unemployed workers spent looking for work last week. Hours Spent Searching Number of Un
In real life, the operation of simple multiplier is affected by many leakages. Leakages in the multiplier arise out of the following reasons: (1) Saving: If all the income is sp
factors that causes the shifts in balance of payments
1. Consider the market for a particular type of computer memory chip. Would you expect the long-run (own-price) elasticity of supply to be larger or smaller than the short-run elas
The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
State the Private sector in the circular flow Private sector total income is known as the national income. As private sector receives entire return from the factors of prod
what are the advantages and disadvantages of unemployment
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