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in vs .
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resource
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labors landscapital
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sum of all value added

the
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Def : at a time
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price index
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deflator =
Il
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GDP deflator

Underground Economy -> produced but not counted to GDP

Secondhand sales

[
underground
Things not counted in GDP Transactions that are
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g .
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e .

g. the sale to a pickle factory

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received other
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The Twin Evils : INFLATION & UNEMPLOYMENT #
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redistributed from lenders

&
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on that that of
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get Minimumnagelegislati
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relationship
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unemployment down)

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ob

* Deflation & High Un

unemployment PL AD
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defeat the market
market
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&
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&
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stocks ,
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more
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borrowers
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Foreign entities
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suppliesareencouraged tobringmeranya
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,

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the full
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~ Trough
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i
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price of resources (land ,

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! FactorsI
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Y AXF(L
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·
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Conduct : ONLY Fed

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Four tools
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!
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,

bank reserve

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I
PL
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----
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borrowing

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ea

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i
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saving and
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toolsDirectionincomeeds
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,
to
mini is

!
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remedy a recession

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SRAs

=> Realise

!
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·
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tall
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sup

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financea
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on *
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loanable funds & Investment ↓
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Net export Multiplier :

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-

S
Marginal propensity to
of function
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-

cause increase in
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-

Des
as
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spending : Total change in
: in income =
multiplier x initial change in
spending

The

balancedbudget
multiplier peda me amount

Automatic stabilizers
E
Definitions

Roles
:

(Prevent
Government

recessions frombecoming
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policies

depresss
to
promote
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 Price of

!
·
Rupees in
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0. 3
0 82.

Every (possibilities

E
nation increases its

& Gains
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specialization
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Two countries should benefit from trade unless DC equal

the
conditions : the terms
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markets bit
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revenue for domestic governme i s
Protectionism gaining Chip
Create Deadweight loss

-
accountingdidedeb ed
S
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abread -

paid to foreigners
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cA + FA = 0

Foreigndirectinvestmentfirmusoperationabreadstrated domestically
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↑
arise
account

debtChange
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(sell
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buy local :

market
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: more S

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T D

a
ot local

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US export > Demand

S
-
>
-
-
-
-

taste I Demand - It

(RelRelative
ative priceevepreciatetreciate
Consumer

the Economic factors incomes Purchasing power #

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!
:

forces of DS
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rate Fixed ER o-
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up
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R NFAV-> inflow > -

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nations intervene

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: value
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=
.
.

the purchase of
Inflow represent domestic financial securities & physical by foreigners/borrowing of foreign funds

flow
:
assets

Financia
11 cap ital key : IR

Outflow :