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Q. Investment demand of the AS-AD model?
Investment demand. As long as we keep nominal interest rate (and thus real interest rates) constant, there is no reason for demand for real investment to change. We will expect nominal investments to increase by the same percentage as price level.
Government consumption. G is an exogenous real variable and we expect no dependence on P by same argument as for private consumption.
Roles of government in controlling market forces under neoclassical view
Upon taking his first job at college your Dad earns an annual salary of $38,000 and set a goal to earn $10000 per year. If his salary increases at an average annual rate of 12% how
Define the term - Productivity Productivity is the concept which measures how outputs can be maximised from given inputs. In factories labour productivity is normally calculate
Q. Construction of real gross domestic product ? To be able to make reasonable comparisons of GDP over time, we should adjust for inflation. For instance, if prices are doubled
barriers to entry?
how would you describe a neo-keynesian (or neoclassical) synthesis? and why did Joan Robinson label it "bastard Keynesian"
What are the Market interest rates The most important interest rates from a macroeconomic perspective are interest rates that the government pays on the loans they use to finan
Q. Determine price level from the quantity theory of money? The price level The price level is determined from the quantity theory of money: P = (M.V)/Y
Money is anything which is acceptable in settlement of a debt. But, paradoxically, the main asset used to settle debts in modern economies is other debts. After all, bank deposits
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
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