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Suppose you have the following information about a closed economy: C = 50 + 0.80 (Y-T) I = 200 G = 100 a) Find out the equilibrium level of income. b) Suppose G in
The rate of interest in the UK also showed very interesting results, to an impulse shock on oil price. The middle left graph from Fig 4.4 shows the results. Initially, in the short
Q. Describe Nominal and real interest rates? To distinguish real interest rate from the ‘normal' interest rate, latter is termed as the nominal interest rate. Nominal interest
We divide all firms into 3 categories: FR includes all firms which acquire raw material (iron ore, farm products and so on), FH all those that produce semi-manufactured goods (stee
what is the function of a budget
What is fixed cost and variable cost? By the Production Function to Cost Curves: A fixed cost is a cost which does not depend onto the quantity of output generated. This i
If income falls below its potential and the income tax rate is reduced, this will: A. raise the passive deficit but reduce the structural deficit. B. raise both the passive and str
Explain whether, the following statements are TRUE, FALSE or UNCERTAIN. Briefly justify your answer. (i) The circular flow shows how real resources and financial payments flow
In an effort to provide tax relief for households while still balancing the budget, Congress votes to raise business taxes and decrease personal taxes. explain the impact of these
Axiom of completeness: Consumer's choice is complete. Implication: Since consumer is rational, she must have a unique preference relation. That means the consumer choice is ei
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