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A Level Economics:

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increase in interest will reduce iinvestment by firms and consumption on large scale purchases by households. Aggregate demand will shift to the left and prices will fall.
Those who have borrowed money will have to now pay more interest, thus they will cut back on spending and so prices will fall.
Hot money will flow into the economy which appreciates the currency.exports become expensive and so it will fall, AD falls and price falls.but ofcourse this depends on elasticity.
However when price falls valu of money increases and so people will demand for less money.when demand for money falls,according to keynesians, interest rate will fall.this can lead to inflation later on.
NI will fall which will decrease the transactionary and precautionary demand , so it will push the interest further down But it will in the long run
 
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sir if u get time once check my answer
and other ppl who download my answer kindly tell me what ever u fill is wrong or need to have more
 

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sir if u get time once check my answer
and other ppl who download my answer kindly tell me what ever u fill is wrong or need to have more

In question number 5 when you are explaining an increase in the short run increase in aggregate demand, the supply curve which you have used in the diagram is for long run. Will we not make a short run aggregate supply curve?
 
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hi sir, can you pls give me the answer for guess paper 4 question 2 in point form? plzzzzzz :)
 
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Share your view when paper-4 is over. But don't mention the questions of exam before 24 hours limit.
 
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