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Business Cycles
Economic growth is not a continuous process. Superimposed on the long-term trends are short-term fluctuations in the levels of economic activity and\or in growth rates. These upswings and downswings are of varying duration and intensity and are referred to as 'cycles'. Governments attempt to smooth out these fluctuations with the use of contra-cyclical monetary and fiscal policies. The latest developments in macroeconomic thought regard business cycles as the central (if not the only) problem of macroeconomics.
On the day his son was born, a father decided to establish a fund for his son's college education. The father wants the son to be able to withdraw $4000 from the fund on his 18th b
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law of indefference curve
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