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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?
Equilibrium in the money market In the IS-LM-model, we have equilibrium in the money market when MD(Y, R) = MS This is the equation
#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function
how to calculate the ultimate change in deposits and credit?
Define the points of individual choices makes and interact. A. How individuals make choices: • Scarcity • Opportunity cost • Trade-offs • Marginal analysis B. Ho
A monopoly is broken into a number of competitive parts. Predict the changes in output and price which are likely to take place. Making the basic assumptions that, 1) The i
Effective Demand The concept of effective demand is the logical starting point of Keynes Theory of Employment. Effective demand manifests itself in the aggregate expenditure of
After some consultants point out that the Acme Toy Company has two bottlenecks in its production of xylophones and yo-yos. The first is a critical grinding machine that only has 9
The aggregate demand curve shows the combinations of the price level and the level of output at which the goods and money markets are simultaneously in equilibrium. Let us now go o
it has been argued that economic development of developing countries has been held back by a persistent fall in the terms of trade of developing countries over the long run
If the Banking system has $500,000 in demand deposit liabilities, $125,000 in total reserves and a reserve requirement of 15%: What is the maximum amount by which the money supply
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