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Short answer - Admission/Application Essay Example

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Due to perfect capital mobility, the real interest rate of world markets is equal to that of domestic markets.
In a closed model however, the interest rates increase…
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Short answer

Download file to see previous pages... The ratio of debt to nominal GDP decreases with an increase in the growth rate of output because the debt values are lower as compared with the increased GDP that results from the increase in output (Carlin and Soskice).
where S is the savings rate. An increase in savings rate increases raises average living standards, the per capita consumption is shifted upwards i.e. increases. Steady state consumption is altered as equilibrium shifts upwards. The positive form of the golden rule relates to this, as savings rate are directly proportional to livings standards.
Effects of an increase in technical progress are similar to those of increase in saving rate. The equilibrium equation where A represents technical change shifts upwards increasing effective output per capita. The growth rate of capital per capita decreases initially.
In the IS-LM, increase in productivity shifts up the production function this means higher levels of employment, output and real wage. The labor supply line shifts to the right, which creates a new potential for supply of ...Download file to see next pagesRead More
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