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Explain crowding out and why it may be considered important for policy makers. Crowding out refers to how enhanced government borrowing (real borrowing!) might serve to raise i
1. Moving from an economically inefficient to efficient allocation of resources will necessarily increase benefits by more than costs. 2. There are two demand curves for a pri
Q. Explain about Capacity Utilization? Capacity Utilization: A company or economy's capacity represents maximum amount of output it can produce. Rate of capacity utilization, h
Suppose that the following equation characterizes the demand for primary education in a developing country X: Q = 100 – 2P Where Q is quantity demanded in years of schooling and
3.Cost Minimization for Cobb-Douglas. Suppose the Acme Gumball Company has the produc- tion function of q=LK. Given that the MPL=K, MPK=L and MRT S=MPL/MPK. Part a-b, we are anal
What is market failure?
Uses and Habit Forming Commodity -price elasticity of demand: The number of possible uses : A commodity has high price elasticity of demand (or elastic demand) if it can be p
Strengthening the Financial Instruments - rationale in era of globalisation: With this in view, following suggestions can be made: i) Finance must be conditioned on a poli
The following model shows the consumption function given: Ct = AD t β 2 Where A and β 2 are unknown constants and D is disposable income. (a) Show how by taking logari
Criteria of a Good Forecasting Method: 1. Simplicity : and Ease of Comprehension: Management must be able to understand and have confidence in the techniques used compli
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