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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!
CHARACTERISTICS OF THE THREE STAGES Stage I Here the Total Physical Product, Average Physical Product and Marginal Physical Product are all increasing. However MPP
d/f b/w MRTS and MRS
REALISM OF PERFECT COMPETITION The assumptions of perfect competition are obviously at variance with the conditions which actually exist in real world markets. Some market
Disadvantages of a Free Economy The free market gives rise to certain inefficiencies called market failures i.e. where the market system fails to provide an optimal allocation
Movements along the supply curve Movements along the supply curve are brought about by changes in the price of the commodity. When price increases from P1 to P2, quant
Q. What is Marginal cost curve? MC curve is also 'U' shaped as in Figure below. Marginal cost curve falls initially but then reaches a minimum point and lastly rises. Shape of
Difficulties in using fiscal policy There are several problems involved in implementing fiscal policy. They include: Theoretical problems Monetarists and the Keynesia
The relationship between, total expenditure and price elasticity of demand has summed up in the below table: Table: Elasticity and Consumption Expenditure Elas
a) A reduce in supply and an enhance in demand will cause the equilibrium: b) Which of the following is most likely to cause a reduce in the present demand for some product X
Q. Relation between average cost and marginal cost? Relationship between MC and AC are the following: If MC is below AC then AC should be falling. This is because, if MC
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