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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.
The entire market is capture by a single firm which can produce at a constant average and marginal cost of AC = MC = 10. The firm faces a market demand curve given by Q = 60 ? P.
2.2 "Our business model works even if all internet software is free ....... We are still selling operating systems. What does Netscape''s business model look like? Not very good."
THE MULTIPLIER ANALYSIS Multiplier analysis explains what happens to circular flow of economic life when the behavior of one of the sectors or the components of aggregate dema
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what causes a shift in the balance of payment?
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