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the whole explanation of dpd
Q. Illustrate diffrent types of interest rates? There are many other interest rates in a society. For instance, you will earn interest when you deposit money in a bank account
ASuppose an economy has overbuilt and suffers from excess capacity A recession ensues due to firms cutting back on expenditures. Is deficient demand more easily remedied by monetar
Axiom of completeness: Consumer's choice is complete. Implication: Since consumer is rational, she must have a unique preference relation. That means the consumer choice is ei
Q. Determine the Exchange rate? Exchange rate is determined by the ratio of domestic price level to the foreign price level. If, for instance domestic prices increase by 10% wh
P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
farmer grows a bushel of wheat & sells it to a miller for Rs. 1.00. The miller turns the wheat into flour & then sells the flour to a baker for RS. 3.00. The baker uses the flour
Q. Explain money market with inflation? The money market with inflation Let's begin with the money market diagram and introduce inflation. As M D relies positively on P
Aggregate supply Remember that labor demand provides us profit-maximizing quantity of L for a given real wage. If W/P is given (as it's in cross model), we can find profit-maxi
Q. Explain about Labor Market in AS-AD model? In AS-AD model, economy will always be on the response curve - the thick line in chart below. Figure: The labor in the
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