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Consider the following insurance market. There are two states of the world, B and G, and two types of consumers, H and L, who have probabilities pH =0.5 and pL =0.25 (high and low
What factors shift the Aggregate demand curve to right and what factors shift the AD curve to left? AD shifts to the right when any component of AD enhances autonomously; e.g
Explain opportunity costs using a PPF where investment goods are on one axis and consumption goods on the other. Again, a good definition of opportunity costs linked to the not
introduction of this model
1. Suppose the wage rate is w = 1. An agent is working 6 hours per day and consumes 5 units of goods per day. Suppose that the agent claims to be indifferent between his current
define stagflation
How does planning serve as a solution to economic problems?
The sales of a company are the part of the total sales of industry. If the conditions of industry changes then the sales of each of the firm in the industry is affected. All teh ti
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Explain how foreign aid might help in the development process of a developing country. Definition/outline of various forms of aid, i.e. donor aid, tied aid, bilateral aid etc.
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