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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?
Lorie teaches singing.Herr fixed cost are $1000 a month,and it costs her $50 of labor to give one class.the table shows the demand schedule for lorie''s singing lessons. Price
Why some country saving less and consumption more?
Socialist Economy: The material means of production are owned by the whole community represented by State under socialist form of economy. All members have equal right in the benef
suppose a firm''s total revenue depends on the amount produced (q) according to the function R= 70q-q2 total cost dependson q: C=q2+30q-q2
Short run production period and long run production period: The short run is a period of production during which some factors of production are fixed and some too are variable
what is the profit maximising quantity of L
Objectives of the WTO: The agreement establishing the WTO reiterates the following objectives of the WTO: • Raising standards of living and incomes, ensuring full employm
Purchasing power parity: When PPP holds, the domestic currency has the same purchasing power at home and in any other country. PPP also implies that a foreign currency will de
User Cost of Capital = Economic Depreciation + (Interest Rate)(Value of Capital) - Example An Airline buys Boeing 737 for $150 million with the expected life of 30
Concept of Stock Replenishment This concept assumes that stock is always available whether there is demand or not. Consider the demand for constituent items, such as componen
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