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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.
Q. Determination of all the endogenous variables? Determination of all the endogenous variables in the AS-AD model Determination of P and Y: Prices and
Sustainability of Current Account Deficit: Theoretically speaking, a current account deficit can be sustained as long as the growth rate of national income exceeds the rate of
Differentiate economic growth and economic development. Economic growth is a raise into real GDP. GDP is only one dimension of development and therefore is a narrow measure of
Determination of L in the cross model As firms will produce less than Y OPT , they require less labor than L OPT . We can determine exactly how much L they need in order to pro
Q. Interest rates and inflation? Assume you have 1 million on 1st January 2008. A basket of services and goods similar to the CPI basket costs 100,000. You can then purchase ex
After the fall of the king, a tax rate of 20% has been introduced in the Frog Islands Republic. The value of Sun corporation is now 100.000€. Bright Star Co. debt has no changed. T
The following Table B presents the 2010 population, employment, and unemployment data among working age persons for several countries. a. Calculate the number of people in the l
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Should the government increase, decrease or remain the same in its level of intervention when it comes to mandating that companies provide product information to consumers? What ha
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