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QUESTION
Explain the meaning of classical dichotomy, neutrality of money and Walras law.
b. "In a Walrasian general equilibrium model with money as a unit of account, only relative prices can be determined" Explain.
c. Discuss Patinkin (1965) proof that a Walrasian general equilibrium model with money market leads to an invalid dichotomy and inconsistency.
d. Discuss the Patinkin (1965) solution to make the model discussed in (above c) determinate and consistent.
Define the planned or command economy system. Planned or command economy: Resources are owned through the state. The state assigns resources, and sets production goals a
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A. Consider the example of renovating a highway that is in poor shape, with large holes and crumbling shoulders that slow down traffic and pose an accident risk. The costs include
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