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You win a lottery. You have the choice of two ways to be paid. If you pick Payout Scheme X, you get $2,750 today. If you pick Payout Scheme Y, you get three payments: $1,000 today, $1,000 one year from today, and $1,000 two years from today. Which choice has the greater present value if all banks pay 10% interest per year now and in the future?
Consider the following utility function: U = X 1 X 2 Where X 1 and X 2 are quantities consumed of two goods. You are considering the actions of a consumer that maxi
Q. Relation between Money - wealth and income? Money isn't the same as wealth. An individual may be very wealthy however have no money (for instance by owning stocks and real e
Long Run Equilibrium:Graphical Analysis In the long run the natural rate of output is the level of output to which the economy will tend to adjust in the long run. This indicat
Absolute income hypothesis
1. Kuhn - Tucker Conditions Max 2x + 3y s.t. pxX + pyY ≤ M. x ≥ 0, y ≥ 0 2. Max (8 + x)(8 + y) s.t. pxX + pyY ≤ M. x ≥ 0, y ≥ 0 Utility function 3. U(x, y)
Explain about the circular-flow of economic activities. Circular-Flow of Economic Activities: Economic Agents: a. Households b. Firms Where they interact:
Use the points on the graph below to answer the following questions. i) What is Ep along D1 (from A to B)? ii) What is the Ep along D2 (from X to Y)? iii) What are
After a competitive bidding process, Firm G wins a contract to collect and dispose of Firm H's hazardous waste for $1,000 per year. Firm G's labor costs are $200 per year, and beca
SUPPOSE MR.CHANSA DEPOSIT HIS MONEY INTO BANK-B,HOW WOULD THE T-BALANCE SHEET LOOK LIKE FOR BANK-B
Q. Money market in the AS-AD model? goods and the money market in the AS-AD model We begin by studying goods market and money market when prices are no longer constant. Fi
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