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Q. What do you mean by Wage inflation? We will develop the Keynesian model removing the assumption of fixed nominal wages. We state wage inflation p w as the percentage averag
Q. Explain about Monetary base? Monetary base is defined as the total value of all currency (coins andbanknotes) outside the central bank and commercial banks' (net) reserves w
Firms in the circular flow We divide all firms into 3 categories: F R comprises all firms which acquire raw material (farm products, iron ore and so on), F H all those that p
THE AD CURVE SHIFT TO THE LEFT WHEN
While referring to the "EYE on YOUR LIFE" section on page 389 of the textbook, discuss the change in the U.S. unemployment rate and inflation rate over the past year based on the P
What is Consumer Price Index CPI is a price index of a specific basket known as the CPI-basket. CPI-basket contains essentially all the service and goods consumed in a country
Perfect Competition. a. What does it mean for a market to be perfectly competitive? What are the three conditions of perfect competition. What does it mean for firms to be 'p
Determination of all endogenous variables We can explain how all the endogenous variables are determined in below figure: Figure: The Keynesian model with the Phillips c
Suppose that Ana is buying only 2 goods: good 1 and 2. If the price of good 1 doubles and the price of good 2 drops by one third, then what happens with the budget constraint? (Ass
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
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