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Differentiate between Actual and Potential output.
Actual output is that level which economy in fact produces. In contrast, potential output is the aggregate capacity output of a nation; the maximum amount of goods and services that can be produced with available resources and a given state of technology.
Macroeconomics We have explained several concepts and Macroeconomic Aggregates which form the basic terminology of macroeconomic analysis. Like other empirical sciences, econom
a small country produces 5000 units of output and has a money suplly of $2000. if citizens want to hold 10% of their income in money ie k=0.1 what are v, $gnp, p and real money sup
An effort to reduce energy costs, a major university has installed more efficient lights as well as automatic sensors that turn the lights off when no movement is present in a room
A monopolist faces the following demand function for its product: Q = 45 - 5P The fixed costs of the monopolist are $12 and the variable costs are $5 per unit. a) What are the pro
Determine about the gross domestic product Growth By (nominal) GDP-growth we mean % change in (nominal) GDP over a particular period of time. Real GDP growth is stated as perce
Explain the difference among saving and investment as explained by macroeconomists. Which of the following situations represent investment or saving? Explain: a) You u
Question 1: What is the equilibrium price and quantity? Question 2: How do you describe the market situation, if the market price is higher than the equilibrium price? Qu
Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the
Shortage, Surplus and Price Mechanism: A shortage is the situation in which the demand exceeds supply, which means producers are unable to meet the market demand for the produc
The monetary system in any economy facilitates trade and allows people to trade more efficiently, as compared to a barter economy. In the United States, the monetary authority is t
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