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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?
Direction of Trade: It is indicative of the structure and level of economic development. As a country develops and its trade gets diversified, it has to seek new outlets for i
Ask qI run a company that makes household power plants that use microeconomic textbooks to generate enough electricity each day for one house. Since there are a lot of used microec
How are the limitations of the economics theory affected? Limitation of Economic Theory: While examining the generality of an economic theory, one must realize any assump
Consider the market for Kitty Litter. Assume this industry is purrfectly competitive and is presently in long-run equilibrium. Suppose people begin to prefer Dogs as pets and Cat
What determines aggregate demand?
Deadline is 20 Hours... 1. A. Explain how one derives the indifference curves from a 3-dimensional utility function. Draw a graph and explain. Which principle explains the concav
why does economist agree or disagree?
Development: Economic development is the process through that a country's economy expands and improves in both qualitative and quantitative terms. Economic development requires co
Will Governments Follow Good Policies? That governments can assist in development and growth doesn't mean that governments will. The broad experience of growth in developing ec
what are the majotr sources of monopoly
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