IS-KM Model with classical supply
discuss with the help of IS-LM model why money has no effect on output in classical supply case
What is the base of categorizing receipts into revenue and capital receipts?
Implication of Fiscal deficit A) It raise the supply of money in the economyB) It rises financial burden for future generation.C) It is the cause of inflation.
Determine the value of MPC whenever MPS is zero? Answer: Whenever MPS = 0, MPC = 1 – 0 = 1.
With the help of graph discuss the determinants of transaction demand.
What is the main difference between FED targeting the interest rate versus inflation and which one is Bernanke using nowadays? Name some countries which use this method nowadays.
Government tax and transfer payments generally
If households become more willing to hold less cash and more stocks or bonds, the
Tariffs: -are also called import quotas. -may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs). -are per unit subsidies designed to promote exports. -are excise taxes on goods exported abroad.
Economists agree that inflation beyond a moderate rate is undesirable as it can often prove disastrous and therefore, it must be kept under control. Economists agree also that an appropriate mix of fiscal and monetary policies can be helpful in controlling inflation.
‘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?’
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