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    (Original post by Apagg)
    1. c) An increase in output should increase money demand, which increases interest rates.
    b) and d) both shift the real money supply out, decreasing the interest rate, and a) - interest rates and bond prices are negatively correlated, a rise in one must be accompanied by a fall in the other.

    2. b) An increase in M reduces interest rates, which increases investment. Output and employment rise.

    3. d) By selling securities the central bank takes domestic currency off the market, reducing the money supply which leads to a fall in prices.
    You are a saviour once again!
    Do you know any sites to revise money supply? We haven't really covered that topic well, and those are the questions I am getting wrong (as you can see)
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    I always found http://tutor2u.net/economics/revision-notes/index.html quite helpful
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    I have read that website. Is there any particular note on it which you think would be beneficial to understand the theory behind the questions I just asked?
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    I'd have thought their stuff on monetary policy etc should cover it, does it not?
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    I will go have a read in a minute, and then report back
    Thanks, once again.
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    hey...does anyone have any sort of revision notes for Edexcel Econs Unit 5B - Development Economics....i cant seem to find them anywhere...thanks...
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    (Original post by aloof47)
    hey...does anyone have any sort of revision notes for Edexcel Econs Unit 5B - Development Economics....i cant seem to find them anywhere...thanks...
    Well, I don't know whats in the syllabus but the tutor2u website is a great source of notes, and its a got a decent development section.

    http://www.tutor2u.net/economics/rev...tes/index.html

    Its not all in one section. T&D, globalisation and protectionism should cover more or less all of it.

    Enjoy
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    In econ I'm supposed to write a development report about a country. However, my teacher never went through with us how a development report is written! Any tips on what the essay format should be like? Any help is appreciated...
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    Is opportunity cost and price of X in terms of Y the same?

    I have difficulty undrstanding the statement - "when the price of X in terms of Y is greater than the opportunity cost of Y, we are paying more than it really cost to produce X. In such a case we may say that the economy is inefficient."(Witztum. A, 2005)
    This statement was made in relation to a linear PPF, where 100 units of labour was available that can produce either 100 units of good X or 200 units of good Y and of course any feasable combinations of both. There was a point A on the PPF of coordinates (25,150), which represents a productively efficient point and a point B under the PPF of coordinates (25,100) which represents an productively inefficient point. I know that the opportunity cost of X is 2 units of Y and that the opportunity cost of Y is 1/2 unit of X.

    My problem come from understanding the price of X in term of Y and the concept of paying more than it really cost to produce X.

    Can someone please help me to understand this important concept. Thanks for the help.
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    Whats the difference between terms of trade and balance of payments? I never really understood the difference until now, when I am reading what both are and still can't understand the whole point of these two terms!!
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    BoP = Exports - imports
    ToT = Terms on which country trades with another. Kind of vague, but if they improve, it means we get more for less.
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    Hello could you help me answering these questions. Giv some tips on how to go about. Thank you. :rolleyes:

    Q1: The Phillips Curve did well for a while, but all this changed in the 1970s, a period of high unemployment and high inflation. This phenomenon was obviously incompatible with the received reasoning of the Phillips Curve. How then might this be explained?

    Q2:What do you understand by ‘asset portfolio adjustment’? Explain its relevance to monetarism.

    Q3xplain how the interest rate bridges the real and the money sectors of the Keynesian model of National Income determination.

    Q4xplain carefully how Keynes argued that cutting wages was an inappropriate remedy for high unemployment in the 1920s and 1930s. Bearing in mind Keynes’s insistence that his analysis was ‘subject to all sorts of special assumptions and … necessarily related to the particular conditions of the time’, under what conditions might it be appropriate to suggest cutting wages in order to raise employment?
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    Q1: Augmented Phillips Curve, rational expectations. Differentiate between short run Phillips Curves and Long run Phillips Curve (vertical, no trade off)

    Q2: Hmm, drawing a blank on this one I'm afraid

    Q3: Interest rate is determined in the money markets and determines output through its effect on investment

    Q4: I'm not familiar with this argument of Keynes'. I'm guessing he was arguing that unemployment was resultant from a fall in AD rather than the classical view of unemployment (structural unemployment, which results from real wage rigidity)
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    Q2. asset portfolio adjustment is affected by monetarism because individuals base their decisions relating to borrowing money on the interest rate and to a lesser extent the money supply. Your asset portfolio is things like property, savings bonds and stock
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    Can money supply and money deanmd be inelastic and elastic like market deamnd and supply? thanks!
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    Money demand can have elasticity with respect to interest rates and income. Money supply is usually fixed by the central bank (exogenously given) and responds only to policy changes, so has no elasticities.
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    Money Supply is usually said to be perfectly inelastic especially when using it to analyse liquidity preference.
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    Sorry, yes, brain fart. As money supply responds to nothing it must be perfectly inelastic
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    (Original post by Apagg)
    Sorry, yes, brain fart. As money supply responds to nothing it must be perfectly inelastic
    Apagg you have helped the needy on many occasions (especially me ) a brain fart, as long as it doesn't smell, is perfectly (no pun intended) acceptable.
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    thank you very much guys!!

    also other quesations:

    Under what economic conditions fiscal policy is no effective at all?

    If I.R goes up leads to I goes down, GDP goes down and inflation goes down. But also leads to hot money flow in right? hot money flow in leads to GDP goes up? so there is a conflict?

    thanks~~
 
 
 
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