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In our 2 period consumption savings model (with no leisure, u(c1, c2), suppose interest income in period 2 is taxed at the rates, where 0 a) Write down period 1 and period 2 bu
casual factors of traditional business cycle and its effects on the sectors of the economy
One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime
Differentiate between Actual and Potential output. Actual output is that level which economy in fact produces. In contrast, potential output is the aggregate capacity output o
defination
Goods in the circular flow If Y R is total value of all goods going from F R to F H , then total value added from all firms in the F R box is equal to Y R (they don't pu
The LM curve with inflation We know that LM curve will shift upwards when P increases (presuming MS is constant). This is still true though we can also add that LM curve glid
Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the
In reference to the above question, assume you know the combination of inputs that minimizes cost. What would happen to this input combination if the price of labor increased? What
A recent study in NJ showed that 50% of all patients will return to the same dentist. Suppose nine patients are selected at random, what is the probability that: (a) exactly five o
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