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Explain the term- inventory investment
We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciation such that actual increase in amount of capital between two periods in time is equal to net investment during this period. Keep in mind that when capital is a stock, investment is a flow. We may talk about a firm's total amount of capital at a certain point in time and a firm's total investment over a period of time.
Briefly explain the dynamics of the 2007 financial crisis in terms of adverse selection and moral hazard.
The inverse market demand curve for a good is p = 100? 0.25Q. the inverse market supply curve for the good is p = 20 + 0.55Q. Calculate the equilibrium price and quantity, consumer
Over the past few years there has been much concern about falling housing prices, and some policy makers have argued that the government should put a floor under prices so that the
does central bank determine money supply in the economy
Q. What do you mean by multiplier effect? Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider th
Consider the following homogenous difference equation: xt=b0+b1xt-1 a) Iterate backwards xt can be written in terms of xt-2. b) Now show xt can be written in terms of xt-3 a
What are the basic differences between the investment curve and an investment demand curve for an economy
Q. Explain about Interest rate? When you borrow money, you normally have to pay a fee for the loan. This fee is frequently known as interest, especially if the fee is proportio
A public good: A) Generally results in substantial negative externalities. B) Can never be provided by a nongovernmental organization. C) Costs essentially nothing to prod
Commercial Banks: Balance Sheet The accompaning table gives the balance sheet of a commercial bank in a simplified format. The balance sheet contains particulars of a Bank's cu
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