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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.
Unemployment rate (LUNEMP): A key variable to assess the performance of any economy when an economy is growing, the unemployment rate will fall as job creation increases and in
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
Suppose that the demand curve for apples is given by Qd = 140 - 5P, where Qd is the number of pounds demanded per year and p is the price per pound. The supply of apples can be de
The city of Johnstown decides to build a new stadium to attract a basketball team from the city of Rosendale. One economic advisor suggests that the stadium should be fi
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what role does interst rate play in refernce to output?
Q. What is Investment demand? Investment demand Investment I(r) is assumed to be negatively related to the real interest rate r Total dema
Four aspects are interesting when we look at inflation data for Sweden During 1800s, when Sweden was primarily an agricultural society, deflation where almost as common as
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Suppose a company is considering two independent projects, Project A and Project B. The cash outlay for Project A is $14,000. The cash outlay for Project B is $20,000. The company
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