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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!
needs for capital budgeting
Marginal Cost This is the increase in total cost resulting from the production of an extra unit of output. Thus, if TC n is the total cost of producing n
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
Q. Availability of Substitutes - Determinants of Demand? One of the most important determinants of elasticity of demand for a commodity is availability of its substitutes. Clos
Long-Term Policies One long term option of tackling balance of payments deficit is export promotion . In the long run this is the best method of improving a balance of payme
CHARACTERISTICS OF THE THREE STAGES Stage I Here the Total Physical Product, Average Physical Product and Marginal Physical Product are all increasing. However MPP
how realistic is the sales maximisation model from your experience with business objectives as persued by firms
USES OF NATIONAL INCOME FIGURES We need national income statistics to measure the size of the "National cake' of goods and services available for competing uses o
Arguments against Monopoly However monopolies have been accused of the following weaknesses. Diseconomies of scale While the monopolistic firm ca
Q. Illustrate Internal Economies of Scale? Internal economies of scale are the benefits of large scale production. They are enjoyed by the firm when it increases its scale of p
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