Draw a graph illustrating the determination of the real rate of interest‚ as described by that model. Be sure to identify the names of each axis‚ and label the curves. Explain and illustrate on that graph what happens in the macro-economy if the level of government spending falls. - In that circumstance‚ what happens to: (explain real briefly) Real GDP Consumption Tax revenue The real interest rate Private sector Investment The government’s Deficit Unemployment If in a slightly different
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Bernanke. II. Theoretical questions 1. Define macroeconomics and explain its roots Re:(A) Macroeconomics is study of a country’s larger economic issues‚ such as how firms compete‚ the effects of government policies‚ and how an economy maintains and allocates its scarce resources. Re:(B) As the world economy has experienced a range of perplexity ‚ such as mass unemployment rate during the Great depression of the 1930s‚ rapid inflation in the 1970s and other recessions in the early 1980s through 1990s
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NG’ANDWE DR. C. MPHUKA DATE: AUGUST‚ 2012. * ABSTRACT This study seeks to investigate the extent to which the Fisher Hypothesis holds in Zambia. The Fisher hypothesis states that nominal interest rates move one-for-one with expected inflation‚ leaving the real rate of interest unaffected. Interest rate is an important variable for macroeconomists because it links the economy of today and the economy of the future through its effects on saving and investment decisions. The validity of
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JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Impact of inflation and unemployment on Jordanian GDP Dr Mahmoud Ali Jaradat AL Albayet University Abstract This paper focus on Impact of inflation and unemployment on Jordanian GDP. Literature is cited relevant to inflation and unemployment. Data analysis is done and concusions are drawn on the basis of discussion. Keywords: Impact ; Inflation ; Unemployment ; Jordanian GDP Introduction Problems of inflation and unemployment are the most important problems
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Economics exam orientated question and solutions Money Explain the quantity theory of money? The quantity theory of money was first propounded in 1588 by an Italian economist. The credit for popularizing this theory in recent years rightly goes to the American economist‚ Irving fisher‚ who gave it a quantitate form in terms of his famous equation of exchange. At present there are two versions of the quantity theory of money. * The transaction approach * The cash balance approach The transaction
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1 Suppose that a country’s inflation rate increase sharply. Explain the following situations. (1 mark for each) a) What happens to the inflation tax on the holders of money? As inflation rate increases sharply‚ the price level also increases sharply‚ causing the real value of money that the holders have to decrease. b) Why is wealth that is held in savings account not subject to a change in the inflation tax? Due to the Fisher effect‚ the bank has already taken inflation rate into consideration. For
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from foreign countries‚ briefly explain what will happen to the GDP. If Exports exceeds imports then it will add to the GDP but if imports are more than the exports it subtracts from the GDP. With this being said if we import less oil from foreign countries then it would positively impact the nation’s GDP. Inflation Questions: 1. If the CPI went from 100 to 104 during the past year‚ the rate of inflation‚ in percent‚ was? (Please show your work) Rate of inflation = (104 – 100)/100 x 100 = 4/100
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1. (7 points) How are presidential election outcomes related to the performance of the economy? The re-election of the incumbent has been synonymous with low inflation and low un-employment. There has been only a few occasions where the results did not follow this norm 2. (7 points) Discuss the difference between Microeconomics and Macroeconomics. Microeconomics deals with the individual parts in the economy and how they relate to each other. Macroeconomics deals with the totals of these
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economy is experiencing high unemployment and what the government should do about it‚ how would each economist explain unemployment and what policies would each advocate? If I were having a conversation about why the economy is experiencing high unemployment and what the government should do about it‚ with a Keynesian and a Classical economist I think that the economists would explain the situations in the following way and would support the following policies. Classical economists promote the
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What is the Philips Curve? Explain why critics believe the relationship no longer holds. Different macroeconomic policies can be implemented in order to achieve government’s main objectives of full employment and stable economy through low inflation. Philips Curve can be use as a tool to explain the trade-off between these two objectives. This essay will first explain the Philips Curve and its relation to inflation and unemployment. Then‚ the breakdown of Philips Curve will be analysed
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