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Whenever real GDP declines, nominal GDP must also decline
Explain about the short term and long term interest rate in money demand. The Opportunity Cost of Holding Money Demand: a. Short-term interest rates Rates onto assets whi
The Transmission Mechanism The mechanism by which the changes in monetary policy affect aggregate demand is called 'transmission mechanism'. Two stages in transmission mechanis
A cupcake store is located in a mall and is the only cupcake store in that mall. The demand schedule for cupcakes (per dozen) is given in the table below. If the marginal cost to p
Suppose that a security costs $3,000 today and pays off some amount b in one year. Suppose that b is uncertain according to the following table of probabilities: b: $3,000 $3,300 $
Q. Consumption function in the AS-AD model? Consumption. Suppose that P increases by say 10% whereas real GDP (Y) is constant. Nominal GDP and nominal national will now have
An advantage of observing statistics from this range is that it encapsulates both positive and negative performances of the economy helping to produce a much more accurate insight
Assume that there are only two inputs (labor and natural resources) producing two goods (movies and gasoline) with no improvement in society's technology over time. Further, assume
Ask question difference between static multiplier and dyanamic multiplier
Which is a better measure of economic well-being real GDP or Nominal GDP? Ans) Well real GDP takes into account the inflation rate and therefore is more accurate at recording th
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