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QUESTION
(a) Explain the real business cycle theory.
(b) Using appropriate diagrams differentiate between inflationary and deflationary gaps.
(c) Differentiate between the Life-cycle theory and the Permanent income theory of consumption and saving.
Question 1: What are the main predictions of the Capital Asset Pricing Model (CAPM)? Discuss the role and significance of the assumptions needed to obtain the predictions.
Discuss about the free market economy in short. Free market economy: Households own resources and markets assign resources throughout the price mechanism. An increase wi
Does economic growth automatically reduce poverty? Growth implies more goods and services are obtainable to satisfy more wants and requirements. But the benefits of growth may
Question: There are currently some 421 Regional Trade Agreements (RTAs) around the world. These RTAs normally provide preferential treatment to member countries, which is again
a. Describe the industry within which your business will be located and describe at least three recent trends in that industry. Note: This information and item b. following may b
Do you agree with what Dick Brandon said regarding sex? Do not take this question too seriously! Even though the quotation had a humorous intention, this does highlight a serio
Why are the terms of trade deteriorating for Less Developed Countries? Problem: The substantial decline within real commodity prices and the deterioration into the terms of
What is the Marshal Plan? Marshal Plan: The Marshal Plan noticed massive aid to post war Europe that led to quick recovery. That Marshal Aid helped but the accurate social
How does macro-economic stabilisation assist growth? Economic agents as the consumers, private zone and overseas investors as like multi nationals make decisions based onto co
Question 1 (9 marks) During the 1990s, technological advance reduced the cost of computer chips. Explain, with the use of supply and demand diagrams, how the following markets a
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