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Flossy has a quasi-linear utility function, 16q1^0.5 + q2. The price of good 1 is fixed at one. Thus, Flossy's budget constraint is q1 + p2q2 =Y, where Y denotes income. 6.1 Compute the interior solution. 6.2 Compute the interior solution where q1 > 0 and q2 = 0. 6.3 Under what conditions on prices and income is the corner solution obtained?
Explain the Exchange rate system in western world The most common exchange rate system in western world during previous century was the fixed exchange rate system. Up to 1930s,
Determine what is the yield curve The yield curve is a graph of interest rates of different maturity (recalculated to yearly rates) at a particular point in time. It is common
Question: Table below shows the recent trends in terms of consumption. (a) (i) Explain what is meant by the term ‘marginal propensity to consume' (MPC) and the ‘averag
An economy shows the following features C=50+0.9(Y-T) T=100 I=100-5i G=100 L=0.2Y-10i M/P=100 X=20 M=10+0.1Y a)Obtain the IS and LM for this economy b)Find out the equilibrium inc
Illustrate the three approaches of measuring national income? Show that these three approaches give identical result. Explain private saving. How is the private saving used
Debate between New Classical and New Keynesian economics?
Ok, so the supply curve for goal in the U.S. is perfectly elastic, while the demand curve has the usual shape. In 2011, the U.S. used 1,003 million tons of coal at an average price
Derive that the complex amplitude of the double convex lens shown in the image below with focal length 1/f = (n-1 ) (1/R 1 - 1/R 2 ). Hint: we derived an plano convex lens in cla
Equilibrium Income The next step is to use the aggregate demand function, AD, to determine the equilibrium level of income and output. This is done in figure . Recall that the
Q. Money market with inflation and rising money supply? Figure: The money market with inflation and rising money supply If we let π M refer the growth rate in money
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