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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?
Location of industry and localization of industry: Location of industry tries to answer the key economic question "where to produce". It involves deciding on the area that an
draw the demand curve,when there is rise in the price of a product on the demand of the product
would a rational producer be concerned with the average or marginal product of an input in deciding whether or not to hire the inputs?
A type of economy (like in Europe in the Middle Ages) which is primarily agricultural however productive enough to support a class of merchants andartisans. Feudal societies are co
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Suppose you have 10 individuals with values {$1, $2, $3, $4, $5, $6, $7, $8, $9, $10}. Your marginal cost of production is $2.50. What is the profit-maximizing price? Using this
three marginal conditions of pareto optimality
How can we identify that something is elastic or inelastic? When demand of any commodity does not change with the change in price of that commodity that item is said by inelas
Define why prices is significant for economy Reason for using different weights is that some prices are more significant than others for economy. Price of gasoline, for instanc
Policies for Technological Advance Without better technology, increases in capital stock generated by investment rapidly run into diminishing returns. And without improvements
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