If the MPC is .70 and investment increases by $3 billion, the equilibr
If the MPC is .70 and investment increases by $3 billion, the equilibrium GDP will:
How Bank rates control the credit? Answer: Bank rate is the rate of interest at which the Central bank lends to Commercial banks. By increasing the bank rate centra
With the general equilibrium framework in place, the stage is now set for introducing fiscal and monetary changes and analysing their effects on the general equilibrium. We will first introduce a fiscal change in the form of increase in deficit-financed expenditure, a
Question: Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have o
Widely accepted normative macroeconomic policy objectives include: (w) full employment and economic development. (x) allocative, productive, and distributive efficiency. (y) maximum freedom and economic profits. (z) job security and equality within th
Why can be value of MPC be not more than one? Answer: The value of MPC will not be more than one since increment in consumption (ΔC) can’t be more than
Define revenue receipts. Write the groups in which they are categorized. Answer: Any receipts that do not either make a liability or lead to reduction in assets is
Explain the main features of Harrod - Domar Growth model. How does the Harrod Domar model explain the occurrence of trade cycles?
Definition of equilibrium price: It is the price which balances quantity demanded and quantity supplied. The equilibrium price is frequently termed as the "market-clearing" price since both buyers and sellers are p
Write a brief note on plan and non-plan expenditure of the government with illustration. Answer: Plan Expenditure
Illustrate which budget expenses does not result in the creation of assets or reduction of liability. Give illustrations too.
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