ECON 1000 Study Guide - Final Guide: Money Supply, Island Country, Ceteris Paribus

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24 Oct 2018
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Use upper case letters to answer: _________, _________, _________, _________, _________, _________, _________, _________, __________ __________c: __________a, __________b, __________b, __________d, __________c, __________b, __________b, __________b, __________b, __________c. 8 marks each: suppose that there was a bad harvest in brazil, and as a result coffee prices went up this year at coffee shops all over canada. Explain briefly: suppose that canadian citizens start saving more as a result of changes to tax laws (i. e. , tax incentives provided to encourage saving). Assume that canada is a small open economy with perfect capital mobility. 3: suppose that bank of canada unexpectedly decreases the money supply. Using a graph representing the market for loanable funds, show and explain what happens to interest rates and investment if a government goes from a deficit to a surplus. 5: describe the notion of purchasing-power parity and the underlying logic for why it might hold between two countries.

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