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When there is a positive expected rate of inflation (i.e., an expected and sustained increase in the levels of all prices), the Benefit Cost Ratio of a proposed project will take on different values depending upon whether one calculates it using current dollars or constant dollars.
Define
what are current dollars ?
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Explain how normal profit and abnormal profit differ. Normal profit (breakeven) - which must contain commentary on the inclusion of opportunity costs. Abnormal profit should be
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Let {(y i ; x i ); 1 ≤ i ≤ n} be an i.i.d sequence of random variables where yi and xi satisfy the linear relationship y i = β 0 + β 1 x i + ∈ i with Cov(x i ; ∈ i ) = 0
how does pp curve solve the problem of how to produce, what yo produce, and when to produce?
Q. Distribution of income? Distribution:Distribution of income reflects the process by which real output of services and goods produced by the economy is allocated to different
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