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Average Propensity to Consume The average Propensity to Consume [APC] is defined as the fraction of aggregate national income which is devoted to consumption. If consumptio
Equilibrium Income In this model, aggregate desired expenditure has three components: Consumption, Investment and Government Expenditure:
Is a “perfectly competitive market” an efficient mechanism for the allocation of scarce resources? When it is, explain why. When it is not, document reasons for either inefficient
The quantity theory of money In the 17 th Century it was noticed that there was a connection between the quantity of money and the general level of prices, and this led to th
What is decreasing marginal cost? All additional lawn mowed generates less benefit than the earlier lawn à along with decreasing marginal benefit; every additional unit generat
Danger of over-specialising A country may feel that in its long-term interests it should not be too specialized. A country may not wish to abandon production of certain
Explain how managerial economics is useful for decision making
NATIONAL INCOME ACCOUNTING This refers to the measuring of the total flow of output (goods and services) and of the total flow of inputs (factors of production) that pass thro
Discuss the determinants of price elasticity of demand
how realistic is the sales maximisation model
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