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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.
Which of the following term is used when your computer stops working suddenly?
Which of the following is the appropriate definition for Information Technology?
___________ is a programming language for creating special programs like applets.
A _________ is a text file that a Web browser stores on a user’s machine.
In the OSI model, which layer is responsible for routing and forwarding data packets?
In all HTML document which of the following elements is the starting element ?
How is multi-tasking achieved in operating systems?
_________ term is used for those hardware devices that are not part of the main computer system and are often added later to the system.
Microprocessor was introduced in which generation of computer?
In the OSI model, which layer is responsible for end-to-end communication and error recovery?