In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending ______
As G increases, IS 1 shifts to IS 2 . At new equilibrium e', interest rate also increase and i > i*. Here,2 things are happening: a) there will now be capital inflow as a result capital A/c surplus b) Since, AD and Y increased, import demand will increase which will lead to current A/c deficit. Since, the magnitude of Capital A/c surplus will be much higher than the magnitude of current A/c deficit; there is BOP surplus. As a result domestic currency appreciates; dd for rupee has increased. As a result Exports decrease and Imports increase (imports have become cheaper) [Net exports falls] IS shifts back to initial level and equilibrium in the goods market is restored. In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending raises the interest rate, so that income must rise to maintain equilibrium in the money market.
The growth of agricultural ecosystems in a self-sufficient and sustainable way is referred as
The available water retained in soil is between_?
When a cross is made between offspring and its recessive parent , it is known as
Salai gum is obtained from which tree species?
The Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN) scheme aims to augment income of farmers by converting biodegradable waste into compressed ...
According to Thomas Robert Malthus, population tends to grow in
What does a more elastic curve signify in terms of price and quantity consumed?
Pyrethrin is extracted from which flower?
Which of the following is best suited as catch crop?
A practice of removing a portion of a plant to enhance its shape, influence its development, flowering and fruitfulness and improve the quality of the f...