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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?
Explain how consumers might benefit from the existence of monopolies. While the standard issue of monopolies having higher prices and lower output that competitive markets migh
If the average variable cost curve is horizontal, what is the shape of the short-run marginal cost curve? What shape would the short-run average cost curve be?
What is the marginal opportunity producing the first unit of paper? The marginal opportunity cost of producing the forth unit of paper?
The Bushman Cinema is the only movie theatre located in the medium-size country town of Sleepy Hollow. The owner wants to charge an admission fee of $10 per seat and past experien
DISCUSS THE COMPENSATION PRINCIPLE OF KALDOR -HICKS
REAL BUSINESS CYCLE THEORY: The parable that motivates this discussion originated with Edmund Phelps and invites you to think that all men (and women) are islands. They have p
Since World War II, North Korea has had a centrally planned economy in which the government makes the big decisions on how resources will be allocated. Why would you expect North K
Major air pollutants can be sub divided into 2 catexampleories: Inorganic gases and particular gases. (A) Inorganic gases 1. Carbon monoxide (CO) CO is a colourless, lethal gas
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Can marginal cost be constant? If so, does this mean that marginal cost are equal to average variable cost?
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