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A passive deficit is the portion of the deficit that exists when: A. inflation is not fully anticipated. B. inflation is fully anticipated. C. the economy is at potential income. D. the economy is beneath potential income.
Suppose an advertising agency is conducting a survey concerning the effectiveness of commercials during the Super Bowl. If 32% of people watch the Super Bowl, and if the agency con
Equilibrium and Disequilibrium In physical sciences, equilibrium is a state of balance between opposing forces or actions. The meaning of equilibrium in economic theory is exa
Suppose that a paper mill "feeds " a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit o
THE PRODUCT MARKET Z=C+I+G C=a+bYd I=Io+I1Y-I2i Equilibrium condition, Y=Z, where Y represents output and Z is aggregate spending. THE FINANCIAL MARKET Md=MT+Mp MT=MTo+MT1Y Mp=Mpo
Q. Describe classical model of macroeconomics? Though we use the term ‘the classical model' as if there were just one classical model, this isn't quite true. For all the models
Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t
what is meant by diminishing scale output
Suppose a major brokerage firm advised its clients to buy cigarette stocks under the assumption that, if consumer incomes rise by 50% as expected over the next decade, cigarette sa
Explain the law of diminishing marginal returns using the example of a factory which is currently running at half capacity and employs more staff
The managers of Firm A recommend that Firm A purchase Firm B because the purchase will diversify the business of Firm A. Diversification of risks is a desirable strategy for indivi
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