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What factors find out the price elasticity of demand? Factors which determine the price elasticity of demand are: a. Whether close substitutes are accessible b. Whether t
What are the effects of the fiscal stimulus on the macroeconomy
The below diagram demonstrates how all the variables are determined in classical model: Figure: Determination of all the variables in the classical model a) Start at
How can an economic development be measured? The UN has developed an extensively accepted set of indices to measure development in opposition to a mix of composite (element or
Q. How to evaluate total savings? Total savings Total savings S(r) depends positively on the real interest rate Remember that total saving
Suppose we're modeling an economy using the Solow model. It begins in steady state. By what proportion does y? (the post-change steady-state per capita GDP) change in response to t
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
Illustrate about the Effective exchange rate Assume that we are interested in external competitiveness of a country, say Japan. To do this we could look at evolution of a speci
The final and most important part of the methodology is the impulse response functions which will provide the most information with regards to the aim of the project. In order to a
Q. Relation between nominal and real interest rate? Relation between nominal interest rate, real interest rate and inflation If we signify the nominal interest rate by R
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