Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Explain money market and price changes?
The money market and price changes
The money demand curve will shift to the right (left) in themoney market diagram if P increases (decreases).
Money supply is an exogenous variable controlled by central bank so there is no automatic mechanism that will change MS when P changes. Remember that money market figure demonstrates the supply and demand for money as functions of R everything else held fixed. Hence we can still use the money market figure in AS-AD model as long as we keep P fixed.
We should now determine how to analyze changes in P in the money market. To do this, keep P constant at two different levels P1 = 10 and P2 = 20. We know that MDrely positively on P and MD(Y, R, P2) > MD(Y, R, P1). Demand for money increases when P increases if Y and R don't change.
Figure: Money market diagram with different prices
If P increases, demand for money will increase for all interest rates. This means that demand curve should be shifted outwards to right when P increases. Note that with a fixed Y and a fixed money supply, if P increases, R should increase for the money market to remain in equilibrium.
What is the different between price effect and sales effect? Both relate to Elasticity and Total Revenue: a. A price effect: After a price raise, all unit sold sells at a hi
A recent study in NJ showed that 50% of all patients will return to the same dentist. Suppose nine patients are selected at random, what is the probability that: (a) exactly five o
uses of national income statistics..
Price 10,9,8,7,6,5,4,3,2,1 QD 0,1,2,3,4,5,6,7,8,9,10 TR? Ed?.
Q. What is Inflation? Inflation between two points in time is defined as percentage increase of price index between these two points in time. Comments: Price inde
Q. What is Keynesian model? Keynesian model is slightly more complicated than the classic model and it is developed in four stages by analysing four separate models. Every mode
The marginal approach to profit maximization means that a firm should produce until a. marginal revenue equals zero b. marginal revenue equals marginal costs c. marginal cost becom
Arrow up or down: An increase in the wage for high school graduates __________ the opportunity cost of college. A) arrow up B) Arrow down
The consumption function of an economy is given by c = 200+0.75(y-t) And the investment function by I = 200 = - 25r. Government purchases G and taxes Τ are both 100. T
Have the micro-finance institutions failed in their objectives?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd