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Q. Assumptions of the AS-AD model? The most significant change we make going from IS-LM model to AS-AD model is to allow P to be endogenous. As P was constant in IS-LM model, w
#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function
In 2010, Wonderlanders consumed 15 million liters of rum at an average price of $5 per liter. The Wonderland department of commerce has estimated that the price elasticity of the d
The quantity of coffee demanded, QD, depends on the price of coffee, Pc, and the price of tea, PT. The quantity of coffee supplied, QS, depends on the price of coffee, Pc, and the
Assume that the following data describe the condition of the banking system: Total Reserves $200 billion Transactions Deposited $700 billion
Stocks and Flows When studying economics, one must be sure whether the variable being studied is a stock variable or a flow variable. Failure to do so can cause faulty economi
Construct loanable funds market in the context of an open economy assuming that the home country is a small open economy. Discuss the effect of an enhance in the govt. expendi
Q. Show the components of GDP? The circular flow - simple version We have defined GDP, gross domestic product, as the market value of all finished service and goods produced
1. Assume the required reserve-deposit ratio is 12%, and the currency-deposit ratio is 38%. How much would money supply change if the Fed made open market purchases of $100 millio
unemployment among undergraduates : a battle for job
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