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Derivation of Indifference Curve: Consider any commodity bundle denoted by point A in the above figure which consist x 0 1 and x 0 2 amount of good I and good II respectiv
Q. Consumption function in the IS-LM model? The consumption function will be the same as in cross model, consumption will depend positively on Y. In the classical model, consum
Positive and normative economics -introductiion Economic theory or analysis evolves from basic propositions about how individual human beings (or individual economic units) beh
Cost Reduction Positive measures to effect a lowering of costs include: reducing national insurance contributions (an ad valorem tax on employing labor);
How rates depends on maturity Rates depending on maturity. Even though rates with different maturity (all recalculated to a yearly rate) need not be exactly equal, they cannot
can a country have a current account deficit and a capital account deficit at the same time?
This problem is based on the Ricardian Model. Assume that 2 countries, Stormlands and Reach, use White Walkers' labor to produce 2 goods, lumber and wheat.
Effects of consumption function.
From the lower left graph of Fig. it can be seen that there is a time lag associated with an oil price shock and its subsequent effect on unemployment. The results show that for th
Crowding out is associated with: A. an increase in business investment resulting from an increase in government borrowing and higher interest rates. B. an increase in private savin
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