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Axiom of completeness: Consumer's choice is complete. Implication: Since consumer is rational, she must have a unique preference relation. That means the consumer choice is ei
How can we determine fixed exchange rate If a nation has a fixed exchange rate (say against a specific currency), the government or central bank may change this fixed exchange
This problem substitutes financial health with housing in a 2 period consumption savings model. The representative consumer has the utility function u(c1, c2) = lnc1 + lnc2 with ea
Perfect Competition. a. What does it mean for a market to be perfectly competitive? What are the three conditions of perfect competition. What does it mean for firms to be 'p
How can an economy achieve mutual gain from International Trade?
list of all theories of business cycle theories
Q. Show the AD curve over time? With inflation, AD curve will no longer be stable over time. In its place, it will glide upwards or downwards at a rate determined by growth rat
Why are the imports subtracted when GDP is measured in expenditure approach? If you woke up in the working & found that nominal GDP has doubled overnight. what statistic wou
What is the difference between 'quantity supplied' and 'supply'? There is a distinction among supply and quantity supplied. Supply explains the behavior of sellers at every pr
Tariffs and Non-tariff Barriers A significant aspect of the trade reforms of the 1990s was the reduction in the then prevailing very high import duties (over 300 percent in so
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