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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?
How has the haberler''s theory of opportunity cost been an improvement over the classical theory of trade
How does a per unit tax affect consumer surplus.
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What is meant by dumping? Dumping is when a producing country dumps goods on foreign markets at a price lower than either the price on the home market or below the cost (HL: ma
Suppose that the short-run world demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short -run equilibrium
Determinants of quantity supplied of a good The quantity of supplied of a product is influenced by factors such as the market price of the commodity, prices of inputs, techno
Price Level:Overall average level of nominal prices in the economy can be calculated, most often as a weighted average of the prices of individualservices and goods (with weighting
discuss african traditional methods of production and processing of food
explain the cobweb model of equilibrium
Budget Constraints * The Budget Line - The budget line indicates all the combinations of 2 commodities for which total money spent equals the total income. * The Budget
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