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As G increases, IS 1 shifts to IS 2 . At new equilibrium e', interest rate also increase and i > i*. Here,2 things are happening: a) there will now be capital inflow as a result capital A/c surplus b) Since, AD and Y increased, import demand will increase which will lead to current A/c deficit. Since, the magnitude of Capital A/c surplus will be much higher than the magnitude of current A/c deficit; there is BOP surplus. As a result domestic currency appreciates; dd for rupee has increased. As a result Exports decrease and Imports increase (imports have become cheaper) [Net exports falls] IS shifts back to initial level and equilibrium in the goods market is restored. In a small open economy with a floating exchange rate, the supply of real money balances is fixed and a rise in government spending raises the interest rate, so that income must rise to maintain equilibrium in the money market.
In November 2021, Pratap Singh Khachariyawas was allocated food and civil supplies in the Cabinet expansion of the state of ______.
Willy Wonka is a fictional character from the children's story book '______'.
Puccinia is a parasitic:
Which translated book of Georgi Gospodinov won the International Booker Prize in 2023?
Which of these countries has become the vice-chair of the Asia Pacific region of the World Customs Organization (WCO) for a period of two years?
United Bank was merged with __Bank in 2020.
As per the recent (August 2024) Statement on Developmental and Regulatory Policy by the RBI, what is the new limit for UPI for tax payment?
Window is to pane as a book is to
Identify whether the following statements are correct or incorrect.
Statement 1: Khasi and Jaintia hills receive the highest rainfall, which exce...
To conserve natural resources for long term use, which of the three R’s will help us?