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Assume the residents of an economy spend all of their income on cauliflower, broccoli and carrots.
In 2003 they buy100 heads of cauliflowers for Rs. 200; 50 bunch of broccoli for Rs. 75 and 500 carrots for Rs. 50. In 2004 they buy 75 heads of cauliflower for Rs. 225; 80 bunches of broccoli for Rs. 120 and 500 carrots for Rs. 100. If the base year is 2003, what is the CPI in both the years?
What is the inflation rate in 2004?
Q. Show the AD curve over time? With inflation, AD curve will no longer be stable over time. In its place, it will glide upwards or downwards at a rate determined by growth rat
Can democracy survive if a majority of the citizenry pays little or nothing in taxes while benefiting directly from a higher level of government spending? Why or why not?
Marginal Propensity to save (MPS) is the ratio of change in total saving to change in total disposable income. Symbolically, MPS = ?S/?Y For example, total
list of all theories of business cycle theories
Figure below demonstrates a more developed version of the circular flow. In this figure we see how goods flow through various sectors of the economy. Figure Money in the c
Q. Is Consumption depend on GDP in the cross model? Aggregate demand The consumption function Consumption C(Y) depends positively on GDP in the cross
There is a joke among economists that children are an "inferior good." In many countries there appears to be a negative relationship between income and the number children in a hou
Summary of the Phillips curves In neo-classical synthesis, augmented Phillips curve is known as the short-run Phillips curve. It is presumed to be stable as long as expectation
Consider the utility function u(x1, x2) = x1x2. (a) Graph the indifference curves for utility levels 1 and 2. (They are symmetric hyperbolas Asymptotic to both axes). (b) Graph the
Suppose there are two investors. One has a project to build a factory; the other has a project to visit casino and gamble on roulette. Which investor has a greater incentive to iss
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