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BFI 306: PUBLIC FINANCE HERMAN MWANGI St.Paul`s University
... taxation leads to a decrease in purchasing power resulting in full ineffective aggregate demand and policies. Note case 1 and 2 constitute fiscal policy measures. The government can also use monetary policies as stabilization instruments. In doing so, the Central Bank of Kenya, the government has va ...
... taxation leads to a decrease in purchasing power resulting in full ineffective aggregate demand and policies. Note case 1 and 2 constitute fiscal policy measures. The government can also use monetary policies as stabilization instruments. In doing so, the Central Bank of Kenya, the government has va ...
Chapter 25 - Aggregate Demand and Aggregate Supply
... – Demand for products exported by United States fell – Fed reacted by cutting money supply sharply • Each of these events contributed to a leftward shift of AD curve – Causing both output and price level to fall ...
... – Demand for products exported by United States fell – Fed reacted by cutting money supply sharply • Each of these events contributed to a leftward shift of AD curve – Causing both output and price level to fall ...
L8_20110415
... • There are three theories explaining the upward slope of short-run aggregate supply: the misperceptions theory, the sticky wage theory, and the sticky price theory. • Events that alter the economy’s ability to produce output will shift the short-run aggregate supply curve. • Also, the position of t ...
... • There are three theories explaining the upward slope of short-run aggregate supply: the misperceptions theory, the sticky wage theory, and the sticky price theory. • Events that alter the economy’s ability to produce output will shift the short-run aggregate supply curve. • Also, the position of t ...
Aggregate Demand and Aggregate Supply
... What matters to people is the real value of money or income—its purchasing power—not the face value of money or income. There are three basic reasons for such purchasing power changes leading to changes in aggregate demand: • The Wealth Effect: The wealth effect is an increase in spending that occur ...
... What matters to people is the real value of money or income—its purchasing power—not the face value of money or income. There are three basic reasons for such purchasing power changes leading to changes in aggregate demand: • The Wealth Effect: The wealth effect is an increase in spending that occur ...
General Economics: Exercise Book by Egor Sidorov
... summing up the basic spheres of economic theory. In principle the book covers the whole range of problems discussed in the general economics course. Each chapters of the book is divided into two parts. The first part of the chapter contains discussion points on chosen problems. These questions have ...
... summing up the basic spheres of economic theory. In principle the book covers the whole range of problems discussed in the general economics course. Each chapters of the book is divided into two parts. The first part of the chapter contains discussion points on chosen problems. These questions have ...
View PDF - CiteSeerX
... Second, rapid internationalisation has been associated with greater specialisation in trade and output within manufacturing, and with accelerated structural change in the pattern of employment (Section 3). Third, though the data do not allow us to examine changes in the behaviour of individual enter ...
... Second, rapid internationalisation has been associated with greater specialisation in trade and output within manufacturing, and with accelerated structural change in the pattern of employment (Section 3). Third, though the data do not allow us to examine changes in the behaviour of individual enter ...
RABE-DISSERTATION-2015 - JScholarship
... mercantilism” must answer the following two important questions: 1) How can policy induce exports? and 2) How do exports drive economic growth? The key motivation at the core of this dissertation that offers an answer to these questions is that having more of an economy’s labor force engaged in the t ...
... mercantilism” must answer the following two important questions: 1) How can policy induce exports? and 2) How do exports drive economic growth? The key motivation at the core of this dissertation that offers an answer to these questions is that having more of an economy’s labor force engaged in the t ...
Monetary Misperceptions: Optimal Monetary Policy
... This paper shows that the optimality of inflation targeting is not robust to the choice of friction. In our model, agents have incomplete information about the state of the economy. In particular, agents are able to observe local money supply, money demand, and productivity, but must estimate the le ...
... This paper shows that the optimality of inflation targeting is not robust to the choice of friction. In our model, agents have incomplete information about the state of the economy. In particular, agents are able to observe local money supply, money demand, and productivity, but must estimate the le ...
NBER WORKING PAPER SERIES TOWARDS A THEORY OF CURRENT ACCOUNTS Jaume Ventura
... With this theory of country portfolios at hand, it is immediate to derive a theory of investment. Assume changes in the world supply and demand for capital are roughly equivalent and the interest rate is stable. Then, investment should be higher than average in those countries and years in which th ...
... With this theory of country portfolios at hand, it is immediate to derive a theory of investment. Assume changes in the world supply and demand for capital are roughly equivalent and the interest rate is stable. Then, investment should be higher than average in those countries and years in which th ...
Social Provisioning, Embeddedness and Modeling the Economy
... prices of production make possible the swaps necessary for the economy to reproduce itself. Implicit in the classical conception of a market economy is a set of quantity relations that must be satisfied in long-period equilibrium (see Walsh and Gram 1980; Kurz and Salvadori 1995). Let the elements o ...
... prices of production make possible the swaps necessary for the economy to reproduce itself. Implicit in the classical conception of a market economy is a set of quantity relations that must be satisfied in long-period equilibrium (see Walsh and Gram 1980; Kurz and Salvadori 1995). Let the elements o ...
EY ITEM Club Special Report on Business Investment
... So, what are the implications of all this for UK business? The first question businesses should ask themselves is whether they have been investing enough to ensure their on-going success. Given the general view that investment has been low in the UK, it is possible that businesses have been assuming ...
... So, what are the implications of all this for UK business? The first question businesses should ask themselves is whether they have been investing enough to ensure their on-going success. Given the general view that investment has been low in the UK, it is possible that businesses have been assuming ...
A Neokeynesian Balance of Payment Model. Study Case on
... Real economy is described by IS equation Y C I G NX , where Y – is output, (GDP), C – consumption level, I – investments, G – public expenditures , Nx – net commercial balance (Export minus Import). We suppose also that in real sector output depend non linear on consumption, investments, gov ...
... Real economy is described by IS equation Y C I G NX , where Y – is output, (GDP), C – consumption level, I – investments, G – public expenditures , Nx – net commercial balance (Export minus Import). We suppose also that in real sector output depend non linear on consumption, investments, gov ...
Global inequality: A new approach for the age of globalization
... outside their own country, in competing with business men of other nations similarly supported by their governments, and in bringing diplomatic or political pressure to bear on the government or people of any weak country where their trading or other economic interests are threatened. It is this ...
... outside their own country, in competing with business men of other nations similarly supported by their governments, and in bringing diplomatic or political pressure to bear on the government or people of any weak country where their trading or other economic interests are threatened. It is this ...
Italian Circuitist Approach
... triangular structure of agents, i.e. a system which includes a labour market and, at the same time, one wants to exclude a barter model, the only possible means of payment consists of liabilities issued by the banking system. What has just been said does not mean that, from the point of view of the ...
... triangular structure of agents, i.e. a system which includes a labour market and, at the same time, one wants to exclude a barter model, the only possible means of payment consists of liabilities issued by the banking system. What has just been said does not mean that, from the point of view of the ...
Economics 102 Summer 2016 Answers to Homework #5 Due 7/13
... government spending policy? f. Suppose that this economy is initially in equilibrium in the above graph. You are told that the government has passed a bill to increase its level of taxation in the economy. Holding everything else constant and given the planned AE line in the above graph, what level ...
... government spending policy? f. Suppose that this economy is initially in equilibrium in the above graph. You are told that the government has passed a bill to increase its level of taxation in the economy. Holding everything else constant and given the planned AE line in the above graph, what level ...
Chapter 18 The Keynesian Model 1. The popular theory prior to the
... a. Incorrect. If the economy is experiencing unemployment equilibrium, the Keynesian school recommends that the government undertake fiscal policy to stimulate aggregate demand. b. Correct. If the economy is experiencing unemployment equilibrium, the Keynesian school recommends that the government u ...
... a. Incorrect. If the economy is experiencing unemployment equilibrium, the Keynesian school recommends that the government undertake fiscal policy to stimulate aggregate demand. b. Correct. If the economy is experiencing unemployment equilibrium, the Keynesian school recommends that the government u ...
(INK) Nodal Economic Development Profile
... Figure 2.4.2: Operational budget allocation between impact areas: 2005/2006 ...
... Figure 2.4.2: Operational budget allocation between impact areas: 2005/2006 ...
Uni Bayreuth
... monetary independence. The costs of abandoning the monetary policy instrument are particularly high in the presence of asymmetric shocks and differences in the monetary policy transmission as has been comprehensively discussed in the context of the European Monetary Union (EMU). Thus, a monetary uni ...
... monetary independence. The costs of abandoning the monetary policy instrument are particularly high in the presence of asymmetric shocks and differences in the monetary policy transmission as has been comprehensively discussed in the context of the European Monetary Union (EMU). Thus, a monetary uni ...
A Primer on Economics: `X` Marks the Spot
... economist. It was, however, Marx himself who named all those who came before him as the ‘Classical School’. It should also be recalled that Marx claimed his theory rested on proofs derived from the science of political economy. The Marginalist Revolution changed the vocabulary. It split political ec ...
... economist. It was, however, Marx himself who named all those who came before him as the ‘Classical School’. It should also be recalled that Marx claimed his theory rested on proofs derived from the science of political economy. The Marginalist Revolution changed the vocabulary. It split political ec ...
Interest Rates
... The interest rate is the relative price of current consumption in terms of future consumption • When any relative price changes, there are two distinct effects that impact consumer behavior – The substitution effect: as relative prices change, consumer typically alter purchases to favor the good th ...
... The interest rate is the relative price of current consumption in terms of future consumption • When any relative price changes, there are two distinct effects that impact consumer behavior – The substitution effect: as relative prices change, consumer typically alter purchases to favor the good th ...
Chapter 10
... Again, recall what classical economists believe occurs when a recessionary gap exists: Wage rates fall, the SRAS curve shifts to the right, and the price level begins to decrease—stop right there! The phrase “the price level begins to decrease” tells us that classical economists believe that price ...
... Again, recall what classical economists believe occurs when a recessionary gap exists: Wage rates fall, the SRAS curve shifts to the right, and the price level begins to decrease—stop right there! The phrase “the price level begins to decrease” tells us that classical economists believe that price ...
Ragnar Nurkse's balanced growth theory
The balanced growth theory is an economic theory pioneered by the economist Ragnar Nurkse (1907–1959). The theory hypothesises that the government of any underdeveloped country needs to make large investments in a number of industries simultaneously. This will enlarge the market size, increase productivity, and provide an incentive for the private sector to invest.Nurkse was in favour of attaining balanced growth in both the industrial and agricultural sectors of the economy. He recognised that the expansion and inter-sectoral balance between agriculture and manufacturing is necessary so that each of these sectors provides a market for the products of the other and in turn, supplies the necessary raw materials for the development and growth of the other.Nurkse and Paul Rosenstein-Rodan were the pioneers of balanced growth theory and much of how it is understood today dates back to their work.Nurkse's theory discusses how the poor size of the market in underdeveloped countries perpetuates its underdeveloped state. Nurkse has also clarified the various determinants of the market size and puts primary focus on productivity. According to him, if the productivity levels rise in a less developed country, its market size will expand and thus it can eventually become a developed economy. Apart from this, Nurkse has been nicknamed an export pessimist, as he feels that the finances to make investments in underdeveloped countries must arise from their own domestic territory. No importance should be given to promoting exports.