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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?
Discuss the advantages and disadvantages in having a managed exchange rate regime. Advantages of a managed/fixed exchange rate Predictability and certainty a) Fi
what is the effect on the market for dvd players if the price of dvd rises
#question#.problems and its solution of microecnomics
what is free market?
The prevention of major swings in economic activity can be handled most easily by the: A. Household sector B. business sector C. financial sector D. government sector why?
draw a PPF when a hurricane slows down the nest two months of butter production?
Question: i) Explain the main problems with government intervention. ii) Why and how do governments seek to control monopolies? iii) A country should specialise in the pr
Explain opportunity costs using a PPF where investment goods are on one axis and consumption goods on the other. Again, a good definition of opportunity costs linked to the not
The economy, however, is facing inflationary pressures. To deal with the macroeconomic problem, the government uses expansionary fiscal policy to decrease taxes and, as an indirect
1. How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service? a 2. The above figure show
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