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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:
Roles of government in controlling market forces under neoclassical view
Q. Describe about Price level and time? We are hardly interested in the value of price level at a certain point in time. What we are interested in is percentage change in the p
After some consultants point out that the Acme Toy Company has two bottlenecks in its production of xylophones and yo-yos. The first is a critical grinding machine that only has 9
Why did housing prices rise rapidly during 2002-2005? Why did the mortgage default rate increase so sharply during 2006 and 2007 even before the 2008-2009 recession began?
Summary of the cross model The below list summarizes the cross model and associates it to classical model: Labor Market: Real wages W/P is exogenous in cross model
A major component of the costs of many large firms is the cost associated with ordering and holding inventory. If the yearly demand for the good is D and the size of each order p
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We define marginal product of labor, MP L as the derivative of f with respect to the L - which is, as (approximately) how much Y will increase when L increases by one unit. We als
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In the long-run framework, budget surpluses: A. should be run on a permanent basis since they boost saving and investment and stimulate economic growth. B. should be run whenever o
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