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PUBLIC EXPENDITURE The accounts of the central government are centered on two funds, the Consolidated Fund, which handles the revenues form taxation and other miscellaneous re
Let Consider an economy with three states. The following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4). The t=0 prices of these stocks are give
The demand curve for the product of a monopolist is a straight line such that quantity just falls to zero at a price of Rs 20 per unit and that the maximum quantity (at zero price)
INSTRUMENTS OF CREDIT CONTROL The central bank employs several instruments to control aggregate credit in the country. While some instruments like the open market operations mi
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
SHORT RUN EQUILIBRIUM OF THE FIRM A firm is in equilibrium when it is maximizing its profits, and can't make bigger profits by altering the price and output level for its prod
The city of Cabernet is very popular for its production of wine. The inhabitants of the city have an aggregate demand for wine that can be described as follows: where Q d
Suppose that the price elasticity of demand for cereal is -0.75 and the cross-price elasticity of demand between cereal and the price of milk is -0.9. If the price of milk rises by
Prices of other goods must remain constant Changes in the prices of other goods frequently impinge on the demand for a particular commodity. If prices of commodities for which
Causes of Inflation At present three main explanations are put forward: cost-push, demand-pull, and monetary. Cost-push inflation occurs when he increasing costs of prod
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