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Explain the term- inventory investment We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciat
Determine about the interest rates The interest rate may be fixed or floating. If it is fixed, you will pay the same percentage for the entire duration of the loan. With a floa
Consider the following utility function: U = X 1 X 2 Where X 1 and X 2 are quantities consumed of two goods. You are considering the actions of a consumer that maxi
Effective Demand The concept of effective demand is the logical starting point of Keynes Theory of Employment. Effective demand manifests itself in the aggregate expenditure of
Rewrite the national-income model (3.23) in the format of (4.1), with Y as the first vari¬able. Write out the coefficient matrix and the constant vector.
Marginal Propensity to consume or known as (MPC) relates to a change in net or total consumption expenditure to a change in the total disposable income. Symbolically it is writt
a) Summarize the basic tenets of the arguments in this case. b) Do you agree with main tenets of the arguments in the case? Why? Justify your answer with detailed explanations. s
A recent study of long distance phone calls made from WPU, showed that the length of the calls follows the normal probability distribution with a mean of 3.2 minutes per call and a
why is imports subtracted from the expenditure approach
AD-curve, just like before, displays combinations of Y and P where both goods market and money market are in equilibrium. At any given instance, even when we have inflation, aggreg
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