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Q. Describe the Keynes motivation?
Keynes' motivation: In good times, when Y is high (above its trend), national income is high (above it trend). Consumers will take this opportunity to buy things they otherwise can't afford. In bad times, conversely consumers simply can't buy things they would have bought if income was higher.
Suppose the banking system has reserves of $750,000, demand deposits of $2,500,000 and a reserve requirement of 20%. a) If the Fed now purchases $125,000 worth of government bon
Discuss the problems of measuring productivity in actual work situations. Also how productivity might be measured for each of the following industries? Finance and insurance (examp
You are the manager of a firm that receives revenues of $40,000 per year from product X and $90,000 per year from product Y. The own price elasticity of demand for product X is -1.
law of indefference curve
Suppose you have the following information about a closed economy: C = 50 + 0.80 (Y-T) I = 200 G = 100 a) Find out the equilibrium level of income. b) Suppose G in
The Research and Development Division of your company has just developed a new gaming system called the Zed Box. The R&D Division spent $800,000 developing this product and the Ma
MONEY AND CREDIT In any modern economy, the quantity of money, aggregate volume of credit and its sectoral composition are important variables which exert significant influenc
what are the advantages and disadvantages of unemployment
Including different interest rates with different maturities would complicate the models however it wouldn't buy you very much. Because interest rates with different maturities are
The structural deficit: A. falls as the economy expands and rises when it contracts. B. changes as actual income changes regardless of potential income. C. does not change when inc
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