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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!
Price Elasticity at Terminal Points The price elasticity at terminal point N equals 0 means that at point N, e = 0. At terminal point M, although, price-elasticity is undefined
The production function is Q= 20 K0.5 L0.5 Question: For the production function Q= 20 K0.5 L0.5 determine four combinations of capital and labor that will produce 100 and 200 unit
Q. Explain the concept of demand function? Identical to the demand theory which pivots around the concept of demand function, theory of production revolves around the concept o
Question 1: (a) How do economists go about studying the economics of the public sector? Describe the four stages of analysis. (b) What are the main reasons explaining syst
how realistic is the sales maximisation model
Using the National Output for Calculating National Income A final method which is more direct is the "output method" or the value added approach . This involves adding up
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
what is the goal of firm
Q. Total cost of Factor Combinations? Here we try to find total cost of every factor combination and choose the one that has the least cost. Cost of every factor combination is
Q. Controlover Supply of Inputs - sources of monopoly? Furthermore, a monopoly situation may arise because of control over the supply of an essential input -skilled labour, raw
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