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5. In this question you should assume that the Marginal Propensity to Consume out of permanent income is one [i.e., no bequest motive + perfect consumption smoothing: c1, = c2 = c
explanations to the short-run fluctuation and pilicy prescriptions of the schools macroeconomics thought
Define the Natural rate of unemployment Natural rate of unemployment is defined as the sum of rates of structural, frictional, and classical unemployment (excluding cyclical un
Q. Describe Market interest rates? The most significant interest rates from a macroeconomic perspective are interest rates that government pays on the loans they use to finance
Separation of growth and fluctuation It is very useful to separate the evolution of a variable which grows over time into a trend and fluctuations around the trend. The graphs
Challenges to the American Labor Force
Suppose that you decide to leave your current job(with a salary of $60,000) to start your own business in a building (with a market value of $400,000) you already own. You pay $45,
If there are economies of scope and if the price for each product equals marginal cost, is it possible for a firm to cover all its costs? If the firm's average cost of production d
Q. Explain about Labor Market in AS-AD model? In AS-AD model, economy will always be on the response curve - the thick line in chart below. Figure: The labor in the
What is Real GDP To be able to make reasonable comparisons of GDP over time, we must adjust for inflation. For instance, if prices are doubled over 1 year then GDP would doubl
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