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Economics, Accounting & Business: Post your doubts here!

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Saiyan, 2pac, memyself, Echelon94

November 2002
Question# 16
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Question# 21
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Question# 29
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answers are C, C andB-respectively!
q16 will be E3 because the level of expenditure has completely changed therefore it will go up but since the tax rates have also increased,the slope will go downwards indicating saving.
q21 duno myself
q29 ithink its B,because a savings ratio helps in increasing more investment for the future.Not really sure here though
 
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youzair 2pac I will answer your questions in short. For 16 Remember that injestion in the economy causes parallel shift of the AD curve and leakages skew then backwards. 21. Just apply MV=PT which I discussed a lot of time. 29. Savings ratio increased the level of multiplier.
 
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youzair 2pac I will answer your questions in short. For 16 Remember that injestion in the economy causes parallel shift of the AD curve and leakages skew then backwards. 21. Just apply MV=PT which I discussed a lot of time. 29. Savings ratio increased the level of multiplier.
ok this is embarassing.I have been posting so many qs and answers that I have seemed to forgotten my queries. Which year is this again?:p
 
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Saiyan said :
A- Untrue, money supply don't affect the speculative demand, it is an idle balance and it is interest elastic. Yes the interest has reduced but this question is related to money supply not interest.
B- Price will rather increase according to monetarists.
C-The price of govt bond will rather increase
D- The velocity of circulation of money will decrease due to the view of keynesians they say that the money supply does not affect inflation as it has been stabilised by the desire to hold money. In short run it is said that people will not be able to allocate their expenditure in short run therefore they save and the velocity of money reduces.
 
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