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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?
Fiscal Imbalance: The persistent rise in resource gap has led to a growing volume of public debt. The central feature that emerges is a serious fiscal imbalance, arising from
graphical illustration describing the influence of an increase in immigrants on the market supply of labour
Suppose that the price of schooling is $20 per year of schooling and it suddenly rises to $40. Compute the point price elasticity of demand at the initial price level and at the fi
SHORT PERIOD ANALYSIS: Short period in production refers to a time when some inputs remain fixed. A fixed input is one, whose quantity cannot be changed readily, whereas, a va
Welfare Analysis 1-Of the following four institutions for allocating apartment to different people at different prices i. The competitive market ii. A discriminatin
What happens to the market for cchicken wings if the price of beer increases?
what are the advantages of monopsony?
what will be the possible concequences if a large scale like Toyota place its new product in Indian market without having forecast the demand for its product
Risk Averse: - A person who prefers certain given income to risky income with same expected value. - A person is careful risk averse if they have a diminishing marginal ut
Ask questiowhat are the importance of the branches of economics
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