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Why is it so difficult for government to achieve all macro objectives simultaneously?
Specifically showing possible trade-offs i.e.
a) Stimulatory policies which enhance AD might cause inflation
b) Growth might conflict with full employment as structural and technological change affects demand for certain labour groups (see sectoral/technological/regional unemployment), supply-side policies might increase efficiency and create redundancies amongst labour groups
c) Full employment might also create inflation
d) Growth might increase imports (HL: MPM, and lower multiplicative effects) and decrease exports due to inflation
e) Growth Æ inflation Æ depreciation of currency
f) Fiscal stimulus may involve deficit spending and debt, which in turn could have a negative effect on the exchange rat
Question 1 (9 marks) During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following mark
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Q. Define Debt? Debt:Total amount of money owed by a company, individual or other organization to banks or other lenders is their debt. It represents accumulated total of past
Exchange Rate Policy: After the second amendment to the Articles of Agreement of IMF which came into effect on April 1, 1978, every member is free to choose its own exchange r
isoquants curve shows
What are the factors that producers in the society may take into consideration when deciding on the what to produce,how to produce and for whom ?
A farmer produces maize according to the following production function Q m = AK 1/3 L 2/3 Where Q m is output of maize, A = land, K = capital and L = labour Given that
Cost in the Short Run Marginal Cost (or MC) is the cost of expanding output by one unit. As fixed costs have no impact on marginal cost, it can be given as: Average Total
The End of the Productivity Slowdown As computers improved and spread throughout the U.S. economy in 1970's and 1980's economists kept waiting to see the wonders of computing
The demand schedule for computer chips is given in the table. Price (dollars per chip) Quantity demanded(millions of chips per year) 200
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