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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?
value of marginal product
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Explain the meaning of the statment "coffee and tea are close substitutes".
Shifting the PPF Curve To raise the manufacturing of one good without reducing the production of the other, the PPF curve should shift outward. The PPF curve shifts outward as
Describe stabilisation policies as by the International Monetary Fund (IMF). Define stabilisation policies as basically a list of demands set forward by the IMF to a debtor nat
Profits University creates student credit hours (y) with two inputs: Professors' hours of work (x1) and TAs' hours of work (x2) according to the manufacture function: f(x1,x2)= 10x
FACTORS RESPONSIBLE FOR POLICY FAILURES: It is the subject of many official and academic studies to try and find out the reasons for the inability of many, in fact, most of th
determination of optimal solution mathematical presentation
Time Value of Money The time value of money is the price or value placed on time. It is commonly thought of as the opportunity cost related with a particular investment. Money
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