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Inflation (RPI) - another imperative channel. Oil is a necessity for the UK, and is price inelastic therefore one can analyse the correlation between a price shock and inflation. It is to be expected that an increase in the price of oil would lead to increased inflation, which would then impose pressures onto GDP. Thus it is of vital importance to observe the relationship between oil and inflation. The data is given as the quarterly rate of change from the previous 12 months.
Question 1: Differentiate between income, price and cross elasticities of demand. How will the concept of price elasticity be useful to the owner of a supermarket who wan
If a government finances an increase in its expenditures by selling bonds to the public, then the aggregate demand curve will: A. not shift. B. shift out more if crowding out occur
Give example to calculate the price level Imagine that we have created a particular basket of services and goods. We calculate price level at four different points in time duri
What is Inherent Limitation?
Desired Aggregate Spending Desired aggregate spending refers to the volume of purchases of the currently produced goods and services that all spending units in the economy wish
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Firm effects are more important the industry effects. What does this mean? Can you think of situations where this might not be true?
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
A restaurant/bar is analyzing its pricing of beer. It has determined that the price elasticity of demand for beer is 0.8, the cross-price elasticity for wine with respect to the pr
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