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Q. Write about the assumptions of the theory of consumer behavior based on the cardinal utility approach. 1. Rationality- It is assumed that the consumer is a rational being in
Q. Explain why the European Union's current combination of rapid capital migration with limited labor migration may actually raise the cost of adjusting to product market shocks wi
Brifly explaine the alternative explanation to the theory of international trade
Q. Why is the H.O. model called the factor-proportion theory? Answer: The H.O. model survey the limitations and the nature of presumptuous that the sole determinant of compar
Q. "Under floating rates, the economy is more vulnerable to shocks coming from the domestic money market." Discuss. Answer: It is true statement, under floating rates an incr
Q. What explains the sharply divergent long-run growth patterns? Answer: It lies in the political and economic features of developing countries and the way these have
Q. Explain why the EMS countries decided to fix their exchange rates against the German DM? Answer: In this manner the other EMS countries in effect imported the credi
review the general equilibrium conditions under autarky and given free trade using the opportunity cost theory of trade
Q. Explain how a rise in real income affects aggregate demand. Answer: An increase in domestic real income Y leads to a rise in disposable income Yd. This increases
Q. A naïve implication of the DD - AA framework is that either fiscal or monetary policy can lead to full employment. Discuss why this view is naïve. Answer: 1. Inflation m
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