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(a) Describe clearly how the interest rate is determined in:
(i) Loanable Funds Framework; and
(ii) Liquidity Preference Framework.
(b) According to Liquidity preference analysis an increase in money supply always leads to a fall in the rate of interest.
Describe using diagrams, how an increase in money supply leads to a fall in the interest rate.(c) Critically assess the statement in part (b)
Derivation of compensated demand curve: Hicksian compensated demand function for x 1 is given by x 1 =x 1 (p 1 , p 2 , U), where Hicksian compensated demand curve for a good
what is Microeconomics?
Cost Function for Savings and Loan Industry * The empirical estimation of long run cost function can be useful in restructuring of the savings and loan industry in wake of savi
Explain why each of the following factors may influence the own price elasticity of demand for a commodity. The narrowness of the definition of the commodity
1. Sam Smith owns an internet radio company that has subscribers in Houston and Dallas. The demand functions for the 2 markets are: Q(Houston) = 50-0.35P(Dallas) Q(Dallas) = 80-0.
using the aggregate demand and supply model (x axis is national output and y axis is price level) if an economy is in a state of disequilibrium where supply is excess of demand u
if coast of good A fall by Rs.1 & coast of good B increases by 1 Rs. what will be the effect on budget line
price elasticity of demand any 2 commodities
The Demand Curve - The demand curve exhibits how much of a good consumers are ready to buy as the price per unit changes keeping non-price factors constant. - This price-qua
Deviation in graph
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