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got it thanksThe PED for imports is price In-elastic. Imagine a government imposing tariff on petrol, there would be a little change in the demand however, the price would shoot up, due to this, the balance of trade would worsen off. This affect would also be observed in terms of trade as now, the imports would cost more so terms of trade would also be worsen.
It test the knowledge of long run phillips curve.how to get B
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good dear students. keep discussing to enhance your knowledge.It test the knowledge of long run phillips curve.
In long run, when the government tries to decrease the unemployment below that of NAIRU (non-accelerating inflationary rate of unemployement) the effect on economy is that it causes inflation. This happens because to generate employement, you need to have investment (multiplier) and due to multiplier effect, the GDP of an economy increases at an oppurtunity cost of inflation. And therefore, the GDP output, when calculated in real terms using GDP deflator formula, shows that the GDP is above potential level of output.
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If it's an import oriented society, then appreciation means that imports would be cheaper and thus it could result in surplus balance of payments, but at the same time, the exports would get expensive in the International market so you'd have to ensure that quality products are exported so that the international customers do not look for substitutes.Can u explain how an appreciation in the exchange rate have a surplus on the BOP?
If it's an import oriented society, then appreciation means that imports would be cheaper and thus it could result in surplus balance of payments, but at the same time, the exports would get expensive in the International market so you'd have to ensure that quality products are exported so that the international customers do not look for substitutes.
Surplus can occur due to many factors. If your economy is an export oriented, you might want to practice J-curve and MLC so that when you de-value your currency, the BOP turns Surplus. Another policy could be restricting the level of imports by practicing protectionism. Moreover, the fact that you should encourage exports so that the value of exports outweigh the value of imports.could you explain do to what factors suplusses occur?
Surplus can occur due to many factors. If your economy is an export oriented, you might want to practice J-curve and MLC so that when you de-value your currency, the BOP turns Surplus. Another policy could be restricting the level of imports by practicing protectionism. Moreover, the fact that you should encourage exports so that the value of exports outweigh the value of imports.
It'd turn into Surplus. I mentioned that in the start of my sentence.Can u talk in terms of wat will happen to the BOP?
bro you could probably post videos on youtube in ur free timeIt'd turn into Surplus. I mentioned that in the start of my sentence.
Youtube is banned in Pakistanbro you could probably post videos on youtube in ur free time
become the new khanacademy
did you?Youtube is banned in Pakistan
Anyways, I do remember you asked me for notes. Tomorrow is Friday, I'd Insha'Allah upload those notes tomorrow after prayers.
post your doubts here
1 WEEK BEFORE EXAMair wen are u uploading them?
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