An economy has been growing for many years at just 1% per year, which most people...
An economy has been growing for many years at just 1% per year, which most people consider slow. An adviser to the government suggests that faster growth in the money supply could increase the growth rate. How would you respond?
Homework Answers
Yes, Increase in the growth of money supply could increase the growth rate in given situation. Rise in money supply can be done by the central bank through reducing rate of interest which will reduce the cost of funds in the economy. Due to low cost of funds there will be an incentive to the investment and consumption demand. Increase in consumption and investment demand will lead to growth of output, employment and income in the economy. Such that the rise in money supply fuel the demand in the economy thereby increasing the growth rate.
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An economy has been growing for many years at just 1% per year,
which most people...
Consider an imaginary economy that has been growing at a rate of 6% per year. Government...
Consider an imaginary economy that has been growing at a rate of 6% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the President that the policies will pay off. To do so, they want to present a comparison of the number of years it will take for the economy to double, depending on the growth rate. According to the rule of 70, determine the number of years it...
4. Using the rule of 70 Consider an imaginary economy that has been growing at a...
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The current economy is strong and many people are feeling confident about their future and ability...
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