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The basic concepts of price theory
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RATIONAL EXPECTATIONS AND ECONOMIC THEORY : We assumed above that the role of economic theory is not to provide quantitative predictions about the future. Suppose we assume ins
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If producers expect future prices to enhance, current supply will decline in favor of selling inventories at higher prices later. In other words, supply will reduce (a shift to th
Implications for the Role of Economic Theory : Like the schedule for the marginal efficiency of capital, expectations about the future market rate of interest underlie the li
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