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Q. Assumptions of the AS-AD model? The most significant change we make going from IS-LM model to AS-AD model is to allow P to be endogenous. As P was constant in IS-LM model, w
The Widget Manufacturing Company must replace a widget machine, and is evaluating the capabilities of two systems. A requirement of management is that the machine chosen must be p
suppose that a persons wealth is kshs. 50,000 and her yearly income is kshs. 60,000. suppose further that her money demand function is given by Md = y(0.35-i) where i= interest
The AS-AD model with inflation When we remove assumption of constant prices to allow varying real wages. Resulting model was known as AS-AD model. Similarly we now remove the a
We define marginal product of labor, MP L as the derivative of f with respect to the L - which is, as (approximately) how much Y will increase when L increases by one unit. We als
Steps to real wage rates to fall Wage 'stickiness' or wage inflexibility may stop the real wage rate falling to the full-employment wage rate. Stickiness or inflexibility is ca
How much do you have to deposit today in order to allow 5 annual withdrawals, beginning at the end of year 8, with the first withdrawal of $1000 with subsequent withdrawals decreas
State the Private sector in the circular flow Private sector total income is known as the national income. As private sector receives entire return from the factors of prod
what effect would a rise in the velocity of money have on output, employment and price level?
Who is considered unemployed?
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