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q describe classical model of macroeconomicsthough we use the term lsquothe classical model as if there were just one classical model this isnt quite
q describe supply and demand in macroeconomicsin microeconomics we are careful to distinguish between demand supply and observed quantity the first
q describe the macroeconomic variablesin this section we have summarizes all the macroeconomic variables the first column denotes the symbol we use
q what do you mean by capital flowswith free capital flows this is a very unreasonable assumption if we domestic interest rate increase against the
q determine the exchange rateexchange rate is determined by the ratio of domestic price level to the foreign price level if for instance domestic
including different interest rates with different maturities would complicate the models however it wouldnt buy you very much because interest rates
q how to control monetary policyremember that the money supply is equal to the money multiplier times the monetary base we will presume that money
q relationship between number of hours worked and unemploymentin all models we presume a negative relationship between number of hours worked and
now we will analyse how macroeconomic variables fit together and present models which explain the main macroeconomic variables using these models
q relation between nominal and real interest raterelation between nominal interest rate real interest rate and inflation if we signify the
note that its changes in prices during 2008 that matter for the high real interest rate time period when your deposit is earning interest this means
q describe nominal and real interest ratesto distinguish real interest rate from the lsquonormal interest rate latter is termed as the nominal
q interest rates and inflationassume you have 1 million on 1st january 2008 a basket of services and goods similar to the cpi basket costs 100000 you
overnight target rates and inflation one of the major targets of every central bank is a low and stable inflation its main control variable is the
q overnight rates and interest rates with longer maturityby controlling overnight interest rates central bank will affect interest rates with longer
q what is the economic role of government what are the roles meaning economic role is the role played by the government in uplifting the economy the
q state the keynesian theory of employmentunder employment theory govt interference aggregate demand- aggregate supply- effective demand income and
q discuss about the factors affecting the price elasticity of demand a availability of substitute- availability of close substitute is important
q explain critical appraisal of chamberlins theorya chamberlin assumed that monopolist competitors act independently and their price manicuring goes
q write about the assumptions of the theory of consumer behavior based on the cardinal utility approach 1 rationality- it is assumed that the
q state the marginal productivity theory what are its features and assumptionmarginal productivity theory of distribution states that in a capitalist
define elasticity of supply what factors influence elasticity of supply there is only one type of identifiable elasticity of supply measuring the
q show factors that govern the price elasticity of demanda the number and closeness of the substitutes- the more and the better the substitutes the
q what is national income what are the different methods of measuring national incomenational income is the aggregate money value of the annual flow
q discuss the different types of letters of credittypes i revocable letter of credit ii irrevocable letter of credit iii deferred payment letter of