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At first, it may seem obvious that consumption will rely on Y. If GDP is doubled in real terms over a number of years, government consumption, private consumption and investment wi
Financial and Real Investment Financial investment simply means transfer of right from one party to another. While one party has made investment, the other has made disinvestme
Two drivers --- Tom and Jerry --- each drives up to a gas station. Before looking at the price, each places an order. Tom says, "I'd like 10 gallons of gas." Jerry says, "I'd like
derive equations for IS,LM and AD curves.
If a country allows trade and, for a certain good, the domestic price without trade is lower than the world price. A) the country will be an exporter of the good. B) the country
This problem substitutes financial health with housing in a 2 period consumption savings model. The representative consumer has the utility function u(c1, c2) = lnc1 + lnc2 with ea
No indifference curve can intersect due to all points on indifference curve are ranked equally preferred and ranked or less more preferred than each other point on the curve.
The below diagram demonstrates how all the variables are determined in classical model: Figure: Determination of all the variables in the classical model a) Start at
Q. Characteristics of endogenous growth theory? There are many different explanations for technological progress. Most of them, though, have many common characteristics:
The rise in the price of oil can be traced to a easy factor, but there are various other contributing factors. The easiest explanation is that the demand for oil is greater than
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