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Under specified assumptions, derive the square-root formula of the Baumol-Tobin's inventory model of transactions demand for money and briefly describe the effect of a one period increase in the price level on the demand for money. How would your answer change if real transaction costs decrease simultaneously with the one-period increase in the price level? Explain carefully and illustrate your answers with a diagram.
The monetarists have demonstrated that the early Keynesians were wrong in saying that money doesn't matter at all to economic activity. Therefore, we should accept the monetarist position that money is all that matters". Do you agree? Why? Why not?
The prevention of major swings in economic activity can be handled most easily by the
when does market equilibrium occur?
NETWORK EXTERNALITIES Till this point we have assumed that people's demands for good are independent of each other. Actually, a person's demand can be affected by the number
Construct a table indicating the social expected loss corresponding to each combination of precaution choices by the two individuals. (ii) What is the socially efficient combinatio
Consider a thin transparent plate whose thickness d(x,y) is a square (instead of a sinusoidal) periodic function of x of period Δ=λ. Show that the angle θ between the diffracted wa
What do you mean by the utility function? The Utility Function: Sometimes this is easier to work directly along with the preference relation and its connected sets. Althou
theory of profit
Government increases the taxes on car ownership. Explain the possible market outcomes of such a decision. As this is a tax paid by owners, and therefore not levied indirectly
The functions of money include; (1) medium of exchange, (2) store of value, and (3) a calculate of worth. Due to money is acceptable as a form of payment for all commodities,
what are the factors causing oligopoly market?
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