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How are individual makes choices? Fundamental principles behind the individual choices are as follows: 1. Resources are scarce . 2. The real cost of anything is what y
Q. How to evaluate total savings? Total savings Total savings S(r) depends positively on the real interest rate Remember that total saving
the circular flow of income in an governed economy
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
Q. AS-AD model with inflation? When we have inflation, both AD curve and AS curve will be gliding. 'The glide rate' of the AD curve is given by Π M whereas it is Π W that appli
Unemployment classification Economists sometimes differentiate between different types of unemployment. There are many type of ways of classifying unemployment however the foll
In 2001, Puerto Rico enacted a law that requires specific labels on cement sold in Puerto Rico and imposes fines for any violations of these requirements. The law prohibits the sal
Use a diagram of the open economy model (e.g. fig 32.4 from the text) to illustrate and explain the effect of the following event on the market for loanable funds, the level of net
An attorney supplies 40 hours of work per week when her fee is $100 per hour but supplies 60 hours of work per week when her fee rises to $120 per hour. Using the midpoint formula,
Consider the economic data for Country A: Unemployment level of 15% Natural Rate of Unemployment is 6%. Required Reserves is 25% C = 50 + 0.75Y; I = 600; G = 250 (note: T = 200 for
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