n the last year there has been a significant increase in the inflation rate in Canada. Use the Keynesian transmission mechanism to explain fully the impact of this increase in inflation on the interest rate.
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- In the last year there has been a significant increase in the inflation rate in Canada. Use the Keynesian transmission mechanism to explain fully the impact of this increase in inflation on GDPIn recent years, the US and few developed countries have interest rates falling to very low levels. Explain this situation according to Keynesian theory.In the last year there has been a significant increase in the inflation rate in Canada. Use the Keynesian transmission mechanism to explain fully the impact of this increase in inflation on aggregate demand.
- How would the level of aggregate demand be affected by a rise in the interest rate in the Keynesian theory? Which components would be affected most strongly?Explain the Indirect Keynesian Transmission mechanism if the money supply increases.Explain how demand-pull inflation is caused when the economy is at, or near, full employment in the form of a Keynesian diagram (with explanations).
- In the last year there has been a significant increase in the inflation rate in Canada. Use the Keynesian transmission mechanism to explain fully the impact of this increase in inflation on each of the following: The money supply The demand for money The interest rate Aggregate Demand GDP. Remember to use subjectWhy does the “quality/new goods bias” arise if we calculate the inflation rate based on a fixed basket of goods?Give a one line definition for the term "DEFICIENT DEMAND" In macro economics.
- On what basis would you reach the conclusion that classical economics is fundamentally incompatible with Keynesian economics regarding the impact of aggregate demand policies on employment, output and interest rate? Explain with the aid of appropriate diagrams.In the last year there has been a significant increase in the inflation rate in Canada. Use the Keynesian transmission mechanism to explain fully the impact of this increase in inflation on each of the following: The money supply The demand for money The interest rate Aggregate Demand GDP.Why is there no upward or downward pressure on the inflation rate when the economy is at full employment?