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A firm's current profits are $1,300,000. These profits are expected to grow indefinitely at a constant annual rate of 3 percent. If the firm's opportunity cost of funds is 6 percen
Consider the following macroeconomic model: Y = C + I + G + NX C = 100 + 0.8 YD I = 300 - 1000 i NX = 195 - 0.1 Y - 100 (E.R.) E.R. = 0.75 + 5 i M = ( 0.8
casual factors of the traditional business cycle and its effect on sectors of the economy?
Given the demand and cost data you will have available (see information below), briefly describe the process you would use to determine optimum output and price levels in the devel
Differentiate economic growth and economic development. Economic growth is a raise into real GDP. GDP is only one dimension of development and therefore is a narrow measure of
Q. What do you mean by multiplier effect? Loans and deposits in banks give rise to a significant multiplier effect. We use a simple instance to explain this effect. Consider th
what are the qualitative methods of controling credit
Stocks and Flows When studying economics, one must be sure whether the variable being studied is a stock variable or a flow variable. Failure to do so can cause faulty economi
Monetary Policy Vs. Fiscal Policy According to monetarists, money is very important in determining the level of aggregate demand and that monetary policy is very potent. In con
Consider the market for the trusty widget (the most common good in the world if economics textbooks are to be believed). Assume that the market is perfectly competitive. Suppose th
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