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the classical model assumes that consumption depends positively on disposable income. now suppose that consumption also depends on the real interest rate. a) sketch the loanable
What will happen to the shape of the money demand curve if the checking accounts bear interest? will it still slope down if the interest of the checking account is fixed while the
Suppose there are two investors. One has a project to build a factory; the other has a project to visit casino and gamble on roulette. Which investor has a greater incentive to iss
In 2004, Olentangy health care cost of capital was 6%. Its investments on a historical cost valuation basis are $80,000; on a replacement cost basis are $100,000. And on a current
Q. What do you mean by Exchange rate? Exchange rate is defined as the price of one unit of currency in terms of another currency. If one euro costs 1.5 USD then 1 USD costs 1/1
Because the structure of the personal income tax is progressive, a larger share of income is taxed at higher rates as real income increases. Therefore, economic growth automaticall
Automobiles arrive at the Elkhart exit of the Indiana Toll Road at the rate of two per minute. The distribution of arrivals approximates a Poisson distribution. A) What is the prob
Inflation in Germany Once we have monthly data on a price index we can calculate inflation. In most nations, the percentage change in price index during one month is small. So,
Q. Aggregate supply in AS-AD model? In order to figure out all the variables in AS-AD model, we need one more equilibrium condition so that we can identify a unique point on AD
Suppose that an individual stock's return is normally distributed with a mean of 11% and a standard deviation of 5%. What is the probability that the stock's return will be less th
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