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Q. Assume an economy is in a liquidity trap.
A. Write an equation expressing interest rate parity under a fixed exchange rate regime.
Answer: Liquidity trap entail R = 0. R = 0 = R* + (Ee - E)/E.
B. Assume Ee is fixed. Suppose that the central bank raises the domestic money supply so as to depreciate the currency temporarily (that is, to raise E currently but return the rate to Ee later). Show that E cannot be raised.
Answer: Ever since R = 0 the equation in part A the interest parity condition implies E = Ee / (1- R*) as Ee and R* are fixed E can't change.
Illustrate a labelled diagram of Hertz's experimental set-up to produce electromagnetic waves. Describe the generation of- electromagnetic waves using this set-up.
what happens when a melt contains 1% ag with 99%pb?
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Ratio of masses of proton and electron is: (1) Infinite (2) 1.8x10 3 (3) 1.8 (4) None of these Ans: (2) 1.8x10 3
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