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Thinking about modifications in the model again: Go back to the original model again, but add a marginal propensity to invest, this is, suppose that I = f ( i and Y). The MPI is defined as ΔI/ΔY and has a positive value. Will this increase, decrease or not affect the value of the government expenditures multiplier? Describe!
LONG RUN OUTPUT In the LR whether or not the firm makes profit will depend on the conditions of entry. For example, when surplus profits exist, there will be new entrants bec
PRINCIPLES OF AN OPTIMAL TAX SYSTEM When taxes are imposed certain conditions must be fulfilled. These conditions are known as Principles or canons of taxation. According to
free trade promotes a mutually profitable regional division of labour greatly enhances the potential real national product ofall nations and makes possible higher standards of livi
production function
According to J.B. Clark's profits arises in a dynamic economy, not in a static one. A static economy is one in which there is absolute freedom of competition population and capital
CLASSIFICATION OF TAXES Taxes can be classified on the basis of: a. Impact of the taxes It means on whom the tax is imposed. On the other hand, incidence of the
What are the tools of factor markets and the distribution of income? Tools of factor markets and the distribution of income: a. Factor distribution of income b. Marginal
Using the CD data estimate a quadratic cost function. Test the hypothesis that there is diminishing marginal cost. Be sure to state what critical value you are using. Then, using t
Advantages of Product Differentiation We can distinguish between those advantages for the firm itself and those for the consumer: a. For the firm. i.
SHORT-RUN EQUILIBRIUM All firms are assumed to aim at maximizing profits or minimizing losses. The monopolist controls his output or price, but not both. The monopoly maxi
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