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Can bonds market grow to infinity ? ( thats means investors will buy company bonds to infinity ,as long as company has excellent credit rating like : AAA or AA+ .)
distinguish between BOP surplus and budget surplus
9. The central bank (the Reserve Bank of Australia) decided to implement an expansionary policy action. What would you expect to happen to the nominal interest rate, the real interest rate and the money supply? Under what economic circumstances IS this type of policy action be appropriate? What dangers might ensue from it (2 marks)
8. Using the AD-AS model show how the Australian economy has continued to expand year after year since 1991. What are the macroeconomic dangers facing Australia? When commentators suggest that the Australian economy is a two speed economy what are they referring to? (2 marks)
7. Distinguish between ongoing demand pull and ongoing cost push inflation. Carefully draw them. Why might it be difficult to establish the extent to which a given rate of inflation is either demand pull or cost push? (
6. Assuming that the money market is initially in equilibrium, trace through the effects of a rise in the money supply on the money market on the interest rate and also on output, employment and the price level. (2 marks)
State the difference between:

Money multiplier and income expenditure multiplier.
-between the interest rate and the exchange rate
- between the balance of payments deficit and the budget deficit
-between the trade deficit and net foreign debt (2 marks)
10. Why has the Australian dollar soared over the last five years? What are the domestic economic implications for producers and for consumers? (3 marks)
Assume that the production function of an economy is given by : Y = A(100N-0.5N) note: O.5N is squared
Where Y is output, A is productivity, and N is total hours worked. The marginal product of labour
associated with this production function is ;
MPN =A(100-N). Initially , A=1.0, but a beneficial productivity shock raises A to 1.1.
The supply of labour is NS =45+0.1w where w is the real wage. Fnd the equilibruim levels of output, hours worked, and the real wage before and after the productivity shock.
it is often said management is a art and social science comment?
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