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What is the Permanent Income Hypothesis? What is the theory's potential relevance for assessing the effects of temporary tax cuts for the purpose of fiscal stimulus? If you were
Given the following payoff matrix (a) indicate the best strategy for each firm (b) why is the entry deterrent threat by firm Ato lower the pruce not credible
Problem 1: The national budget exercise is nothing more than a political exercise. Discuss. Problem 2: a. What do economists mean by the term ‘efficiency'? b. What
Equilibrium National Income in a Frugal Economy Saving and investment are examples of two categories of expenditure called withdrawals and injections. A WITHDRAWAL is any inc
Discount Rate (Bank Rate) This is the rate on central bank advances and is also called official discount rate or "minimum lending rate". When commercial banks find themselves
Limitations of Open Market OperationsLimitations For their success central bank open market operation assume that commercial banks in the country will expand their credit port
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
Decrease in Demand At the initial equilibrium price P 1 , quantity demanded falls from q 1 to q d . But the quantity supplied is still q 1 at this price. Hence, this
Describe the Application of economic theories Pertinent business decisions necessitate an unambiguous understanding of the environmental and technical conditions under which bu
The concept of point elasticity is applicable where change in price and the resulting change in quantity are infinite or small. Though, where change in price and consequent hunger
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