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Expectations played a major role in Keynes' theory of the determination of aggregat output and employment in market economies in the short run. Expectations about future yields on investment projects underlie 'the marginal efficiency of capital' schedule However, the volatile nature of these expectations plays a major role in explaining why investment expenditure and therefore output and employment in miarket econornies are subject to fluctuations.
Diversification - Assume that a firm has a choice of selling air conditioners, heaters, or both of them. - The probability of it being hot or cold is 5%. - The firm woul
The drawbacks of a mixed economy actually depend on how "mixed" it is. For instance, if it is mixed more towards a free-market, there is little regulation (some may see this as a g
Why do some people believe that a mixed economic system solves basic economic problems? Ans) It is due to the private sector and public sector both have a say in answering the
the prevalence of excess capacity is the direct consequence of the existence of monopolistic competition
Determine the Business Cycle and Classical Economists Business Cycle: The business cycle is the fluctuations in the rate of economic growth that take place in the economy. Th
ELEMENTARY THEORY OF PRICE FORMATION: DEMAND-SUPPLY ANALYSIS: We discuss the elementary theory of price formation. Demand curve in the market is derived from the aggregate con
CURRENCY UNIONS AND OPTIMUM: This Section explains the working of monetary unions and common currency areas. The Section also examines the case for and against optimum currenc
reasons for and against free trade with foreign sector
relationship between tfc , tvc , tc
Fixed costs are those which are independent of output that is they do not change with changes in output. These costs are a fixed amount which must be incurred by a firm in the shor
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