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Illustrate an example of Consumer Price Index For instance, if we spend twice as much on apples as on pears, apples would have twice the weight in basket. The precise details o
Marginal propensity to SPEND refers to: a. a nation's additional spending on a good per an additional unit of expenditure. b. a nation's additional consumption based on a unit incr
There is a joke among economists that children are an "inferior good." In many countries there appears to be a negative relationship between income and the number children in a hou
An investor has a series of three $15,000 payments expected to be realized at the end of years three, four, and five. Calculate the present value P at time zero and the correspondi
In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price negotiations between customers and new-car de
Lag Length criteria VAR Lag Order Selection Criteria Endogenous variables: OIL EXCH R RPI LUNEMP GDP
Concept of Preference, Utility Function: Concept of Preference, Utility Function and Indifference Curve Consumer preference ('R') specified by the above axioms can be represe
The Stop decay company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per month over the past year. Recently, its closest competitor, Decay fighter, redu
Butthole Industries is buying out Avengers, Inc. Butthole and Avengers both have market capitalizations equal to their fair value or the present value of their net cash flows. Bu
Relationship between the interest rate and the bond price Note that the higher the issue price, the lower the interest rate. Similarly when the price of a government bond incr
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