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Question 1: (a) What are the characteristics of market and command economies? (b) In a number of countries in recent years, there has been a movement towards a greater rel
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
Joe has preferences over pizza (p) and beer (b) given by U = pb. The marginal utilities are MU p = b and MU b = p, and Joe's income is I = 60. 1. Find Joe's optimal consumptio
Shortage, Surplus and Price Mechanism: A shortage is the situation in which the demand exceeds supply, which means producers are unable to meet the market demand for the produc
ACCOUNTING SYSTEM-EXAMPLE IV Now consider the economy as in example III. In the next year same outputs were produced and the same incomes were paid out. However, the household
There are three industrial firms in a quaint town of South Orange where the municipal government wants to reduce pollution to 120 units from uncontrolled level of 210 units. Three
Store of value - Economic functions of money If you are a fisherman and have a temporary surplus of fish that you want to store for the future, storing the fish might not b
Comparative if Person can make 15 wristbands and hour and 3 potholders. What is the comparative advantage? If same person works 20 hours a week graph the possible combinations sh
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?
Q. Describe Exports and imports in AS-AD model? Exports and imports. This is more difficult to justify owing to exchange rate. Suppose that we have a flexible exchange rate a
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