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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!
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
Unit Elasticity of Supply Supply is said to be of unit elasticity if changes in price bring about changes in quantity supplied in the same proportion. Thus, when price rises,
Monetary Policy Meaning of Economic Growth: The primary function of an whether socialist or capitalist is to satisfy people maximum wants. It must produce consumer goods to make
Let there be two consumers A and B, each buying at most two units of a good. A values having one unit at £10 and having two units at £12 whereas B values having one unit at £8 and
Q. Explain about Inventory Economies? Inventory Economies: Role of inventories is to aid the firm in meeting random changes in the output and the input sides of the operations
A toy manufacturer makes output according to the production function: where n is the number of workers employed by the firm, O is a technological parameter and g the worker
wHAT IS THE SIGNIFICANCE OF EXPECTATION ELASTICITY ?
Equilibrium Income In this model, aggregate desired expenditure has three components: Consumption, Investment and Government Expenditure:
“Managerial economics involves use of economic analysis to make business decisions involving the best use of a firm’s scarce resources” Explain the statement with suitable example.
Describe about the Theory of profit Every industrial and business enterprise aims at maximising profit. Profit is the difference between total economic cost and totalrevenue. P
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