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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?
Laspeyres index The Laspeyres index tells us that: - The amount of money at present year prices which an individual requires to purchase bundle of goods and services which w
Income and Substitution Effects A fall in price of a good has the two effects: Substitution & Income -Substitution Effect Consumers will tend to buy more of the good
assignment of demand thorey
Theories and Models ?? Microeconomic Analysis – Theories are taken in use to describe the observed phenomena in terms of a set of essential rules and
The least square method is based on the assumption that the past rate of change of the variable under study will continue in the future. It is a mathematical procedure for fitting
What is the Molarity and Normality of the ferrous ammonium salt ? For exam....196 gm (initial)
1. Define the concept of opportunity cost in your own words. Given an example from your own life of the opportunity cost of a decision (do NOT use classroom examples). Explain why
using ? tools of economic highlight on comsumption
what is the south africas governments standpoint on international trade
Price elasticity of supply – Computes the percentage change in quantity supplied resulting from a 1 percent variation in price. – The elasticity is usually positive as price
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