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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?
Problem 1: i) Is Protectionism always beneficial? Discuss. ii) To what extent can a country actually rely on the principle of Comparative advantage before engaging in in
Consider a person''s decision problem in trying to decide how many children to have. Although she cares about children and would like to have as many as possible, she knows that ch
Q. What is Joint Stock? Joint Stock: A form of business in which company's assets are jointly divided among a large number of different individual owners, each of whom owns a s
What is the expected profit?
illustrate a long-run equilbrium using diagrams for the gold market and for a representative gold mine
1. Explain how absolute advantage and comparative advantage differ? 2. Give an example in which a person has an absolute advantage in doing some thing but another pers
Lovers of classical music persuade Congress to impose a price ceiling of $40 per concert ticket.
Use of Income elasticity of demand: Income elasticity of demand on the other hand, has the following uses (i) Income elasticity of demand shows how the pattern of consumer de
why is choice inevitable in the understanding of economics science?
Pure Monopoly: Pure monopoly examined the market structure that is generally regarded as the polar opposite of perfect competition – i.e. the monopoly model. Like the perfect
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