The need of a central bank for a modern-industrial economy.

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Answer 1

Question

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.

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C1 The following model can be used to study whether campaign expenditures affect election outcomes: voteA = 0 + B₁ log(expendA) + ẞ₂ log(expendB) + ẞ3 prtystrA + u, where voteA is the percentage of the vote received by Candidate A, expendA and expend are campaign expenditures by Candidates A and B, and prtystrA is a measure of party strength for Candidate A (the percentage of the most recent presidential vote that went to A's party). == (i) (ii) (iii) (iv) What is the interpretation of B₁? In terms of the parameters, state the null hypothesis that a 1% increase in A's expenditures is offset by a 1% increase in B's expenditures. Estimate the given model using the data in VOTE1.DTA and report the results in usual form. Do A's expenditures affect the outcome? What about B's expenditures? Can you use these results to test the hypothesis in part (ii)? Estimate a model that directly gives the t statistic for testing the hypothesis in part (ii). What do you conclude? (Use a two-sided…

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Answer 2

Question

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.

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Answer 3

Question

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.

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Answer 4

Question

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.

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Answer 5

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.

Answer 6

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.

Answer 7

Chapter 29, Problem 1DQ

To determine

The need of a central bank for a modern-industrial economy.

Answer 8

Expert Solution & Answer

Explanation of Solution

A central bank is the apex bank of a country. It controls the money supply of the economy and keeps the economy stable and free from the economic fluctuations. The primary function of a central bank is to control the money supply in the economy. A central bank promotes the safety of the country’s banking system by requiring sound business practices of its member banks and by acting as a lender of the last resort. Therefore, the central banks play an important role in the functioning of an economy.