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Monetary policy The problems concerning the ability of monetary policy to influence the economy, as for instance the doubts about the ability of lower interest rates to st
REALISM OF PERFECT COMPETITION The assumptions of perfect competition are obviously at variance with the conditions which actually exist in real world markets. Some market
ECONOMIC EFFECTS OF TAXATION a. A deterrent to work Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to production
Properties of Indifference Curves An indifference curve is usually convex to the origin. Indifference curves slope downwards from left to right. A set
NATIONAL INCOME AND WELFARE The relationship between National Income and Welfare is best explained in terms of economic growth (By economic growth is meant capacity expansio
Q. Explain the Shut down point? ShutdownPoint: With MR = MC, firm attains equilibrium at point E where it produces OM amount of the output. To produce this output, firm incur
Real Rigidities in the Goods Market The most important factor associated with real rigidity in the goods market is the existence of imperfect competition. Imperfect comp
Buffer stocks and stabilization funds In this case the government buys up part of the supply when output is excessive, stores this surplus, and resells it to consumers in time
discuss baumols dynamic models
Using Total Expenditure for Calculating National Income The expenditure approach centres on the components of final demand which generate production. It thus measures GDP
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