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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!
Now, let's modify our model a bit. Let's add a fourth sector of spending so that Y = C + I + G + X n with X = X o and M = M = f (Y). Will this change, by itself, increase, decrea
Using the discounting principle calculate the present value of an annuity of five years at Rs. 500 payments made at the end of each of the next five years at 10% interest. stion..
ECONOMIC EFFECTS OF TAXATION a. A deterrent to work Heavy direct taxation, especially when closely linked to current earnings, can act as a serious check to production
business decision making concepts of certainity risk unertainity sources of business risk steps invoived in analysiis of risky decisions risk adjustment etc
Limits on the process of bank deposit creation On the demand side , there may be a lack of demand for loans, or at least of borrowers who are sufficiently credit worthy .
What is decreasing marginal cost? All additional lawn mowed generates less benefit than the earlier lawn à along with decreasing marginal benefit; every additional unit generat
WASTE IN IMPERFECT COMPETITION Monopolistic competition involves some degree of waste in two aspects. When new firms enter the industry and the demand for the individual fi
Bank Rate Bank rate is the rate at which the central bank gives loans to the commercial banks against the security of government and other approved first class securities. In
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The concept of isocost In the use of resources, firms are faced with opportunity cost. For every addition of say capital, they must forego a unit of say labour. Expositio
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