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 midnight session in Parliament that marked India’s transition to Goods and Services Tax was reminiscent of a similar occasion on the eve of In...
The number of acres (A)/ destroyed by wildfires (B)/ has increased dramatically (C)/ over the past several years. (D)
They yoked (A) their critique (B) of capitalism to a passionate reaffirmation (C) of the egalitarian Enlightenment principals (D) of the America...
The teacher, as well as the students have gone on an excursion to Ooty during their summer vacation’
They are (1)/ residing here (2)/ since 1999 (3)/ No error (4)
Sheela, who is (A)/one of the successful entrepreneurs, (B)/are giving (C)/tips for startups (D).
In each of the questions, a sentence has been divided into four parts, one of which may contain an error. Identify that fragment and mark it as your an...
The concept of ugly 1)/ and beautiful 2)/ are interchangeable 3) /and relative 4) /5)
Find the error
When I called on her she did her home work
In each of the questions, a sentence has been divided into four parts, one of which may contain an error. Identify that fragment and mark it as your an...