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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?
Describe the poverty cycle and suggest how a developing country can break the cycle. The poverty cycle is explained as the trap developing countries can land in; low incomes →
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CURRENCY UNIONS AND OPTIMUM: This Section explains the working of monetary unions and common currency areas. The Section also examines the case for and against optimum currenc
#queA monopolist has a constant marginal and average cost of $10 and faces a demand curve Of Qd = 1000-10P. Marginal revenue is given by MR= 1000-1/5Q. stion..
net preparation ranjna baghel
Problem: i) What might be the possible causes of inflation according to economic theory? ii) Taking stable prices and full employment as two macroeconomic objectives of gov
Internal and external economies of scale: Internal economies of scale are the advantages or benefits that the firm enjoys as it expands its size or increases its scale of ope
Determine Optimal Price, Quantity and Economic Profit A firm has a demand function P = 200 – 5Q and cost function: AC=MC=10 and a potential entrant has a cost function: AC=MC
Your firms production function : Q=4K^1/2L^1/2 Suppose that the price of labor is $5 and the price of capital is $20. Your firm desires to produce 200 units of output. How much
Revise business plans to incorporate appropriate changes.
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