FX rates
In June 2005, a Big Mac sold for 6,000 pesos in Colombia and $3.00 in the United States. The exchange rate in June 2005 was 2,300 pesos per dollar. So, on Big Mac purchasing power parity grounds the Colombian peso was
The economic effects of inflation are all pervasive. It affects all those who depend on the market for their livelihood. The effects of inflation may be favorable or unfavorable, and low or high depending on the rate of inflation. For example a galloping the hyper inf
What happens when AD > AS past to full employment level of employment?
Describe any two measures by which a Central Bank can attempt to decrease the gap. Answer: Central bank can decrease this gap by adopting two measures illustrated b
In the figure shown below, line T0 depicts a tax system which is: (1) Progressive. (2) Regressive. (3) Proportional. (4) Unbiased. (5) Recessive. Q : Functions of central bank Describe Describe functions of central bank? Answer: (A) Issue of currency: Central bank is the only authority for the issue of currency
Describe functions of central bank? Answer: (A) Issue of currency: Central bank is the only authority for the issue of currency
Economic growth is generally defined as a sustained increase in per capital national output over a long period of time. It implies that for economic growth of a nation, the rate of increase in its total output must be greater than the rate of population growth. It ma
Categorize the borrowings and recovery of loans into capital and revenue receipts of government budget. Give reason too.
What does fiscal deficit in government budget mean? Answer: This means more borrowing on the portion of government.
‘The country is at present in recession and this has led to worse tax revenue and high expenses. The effect is a huge deficit. The government decides to increase taxes and lower government expenses. Is this an excellent idea?’
Bank rate: This is the rate at which the central bank loans money to commercial bank.
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