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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.
Illustrate an example of Consumer Price Index For instance, if we spend twice as much on apples as on pears, apples would have twice the weight in basket. The precise details o
factors in economic growth
What do you mean by Gross Domestic Product? Gross Domestic Product: GDP stands for Gross domestic product, measures the value of all concluding goods and services produce
Show the effects on the price level and real GDP of a major union wage settlement that significantly increases wages. Is this a supply shock, a demand shock, or both?
A mechanical engineer who is anticipating paying for his daughter's college education plans to start depositing money now (year 0) and continue through year 17. If he deposits $ 50
Which of these variables are discrete and which are continuous random variables? a) The number of new accounts established by a salesperson in a year. b) The time between customer
define business cycle
Suppose a major brokerage firm advised its clients to buy cigarette stocks under the assumption that, if consumer incomes rise by 50% as expected over the next decade, cigarette sa
Examine the graph below. The mayor has placed a $2 tax on the sale of each taco sold within the city. How large is the decrease in producer surplus?
Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
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