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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?
Question: (a) Explain the factors that contributed to the adoption of structural adjustment programme by a majority of Least Developed Countries in the 1980s? (b) Describe t
What are the basic economic institutions? There are two fundamental economic institutions which have been so far used into the real world are as: a. Market economic institut
Revenue and Profit Maximization: Whenever a good is produced, the individual firm which has produced incurs costs which are are referred to as private costs and the society in
why is choice inevitable in the understanding of economics science?
elasticity concept in policy formulation
Graphical Representation of Various Returns: Diminishing Returns: If the TP curve is as shown in the adjacent Figure, then the MPL given by tanθ is throughout less than the A
describe returns to scale and give examples of each.
Calculating Variance (σ) The standard deviations of the 2 jobs are: The standard deviation is used when there are several outcomes instead of only two. * An Examp
Below are the two estimated cost functions. describe what type of data was most likely used to estimate each one and why. Explain which is a short- run function, determine the leve
Problems Using Point Elasticity - We may need to compute price elasticity over portion of demand curve instead of at a single point. - The price and quantity used as base wi
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