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Marginal Propensity to save (MPS) is the ratio of change in total saving to change in total disposable income.Symbolically,
MPS = ?S/?Y
For example, total saving in an economy increase from $ 2,000 crore to $ 5,000 crore, and total disposable income rises from $ 10,000 crore to $ 20,000 crore. Then, the MPS will be calculated as follows:
Derive the following equilibrium for the IS-LM model:
Assume that when an economy has a GDP of $500, Consumption is $550. The MPC is .75. Investment is 25. Begin the problem by setting up an Income/Consumption Schedule like the one on
how inflation trade off is not feasible under adaptive expectation
An effort to reduce energy costs, a major university has installed more efficient lights as well as automatic sensors that turn the lights off when no movement is present in a room
The Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price
Q. Assumptions of the AS-AD model? The most significant change we make going from IS-LM model to AS-AD model is to allow P to be endogenous. As P was constant in IS-LM model, w
A) Suppose Jean Splicer, an investor, buys $300,000 of shares of stock in a diversified bundle of Bio-tech firms and exactly one year later sells those shares for $315,000. Assume
The World Trade Organization is a successor organization to the A.United Nations. B.World Bank. C.International Court of Justice. D. GATT.
One alternative way to calculate the total change in money supply when the Fed injects money into the economy or takes away money from the economy is the amount of money injected o
While referring to the "EYE on YOUR LIFE" section on page 183 of the textbook, apply this concept to your life. Develop your own policy position on price floors and price ceilings.
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