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Interest rate sensitivity can also be understood from another perspective. The total cost of a commodity is not just its price, but also what must be paid to borrow money to purchase that item. With modern views of immediate gratification, it is rare for someone to save to purchase a house, or any other big ticket item, what is more common is to borrow the money, buy the item, and make instalment payments. Thus the interest charges are a part of the total cost of acquiring that big ticket item - as consumer sensitivity to interest rates when buying a house or a car.
Curvature of the Iso-quant: An iso-qunat is convex to the origin. This is so because as more and more units labour are employed, the producer would prefer to give up less and
How have economists traditionally defined "economic growth," and how is that different from "living standards growth"? Economists have traditionally explained economic growth
The Productivity Growth Slowdown However in 1973 steady trend of climbing rates of productivity growth stopped cold. Between 1973 and 1995 measured growth in output per worker
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"price makers" never want to produce in the inelastic part of their demand curve why
Critically appraise the IS-LM and the AD-AS models as analytical tools in explaining the macro-economy (the business cycle). In preparing your essay, please think about the followi
Q. What is Monetarism? Monetarism:Monetarism was a right-wing economic theory (associated with work of Milton Friedman, in particular) which believed that inflation could be co
Problem: (a) Why is an error term added to a regression and explain its importance in the OLS procedure? (b) Suppose we have a linear equation with a constant term, one expl
How does the PED and PES of commodities affect producers in developing countries? Explanation of PED (formulaic) Definition of PED outlining commodities as having lo
What are the basic economic institutions? There are two fundamental economic institutions which have been so far used into the real world are as: a. Market economic institut
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