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(i) Do the laws of economics still work today? (use the case discussed in class to answer this question or any other examples) (ii) Provide examples of three factors that can sh
Direct intervention The government can also intervene directly in the economy to see that its wishes are carried out. This can be achieved thorough: a. Price and i
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
Hawtrey views about Trade Cycle Hawtrey views trade cycle as a purely monetary phenomenon. According to him, inventory cycles result from fluctuations caused in the desired rat
The quantity theory of money In the 17 th Century it was noticed that there was a connection between the quantity of money and the general level of prices, and this led to th
Explain the Decision-making theory Decision-making theory and game theory that recognise the conditions of imperfect knowledge and uncertainty under which business managers ope
Indifference curves In order to explain indifference curves, we will again make the simplifying assumption that the consumer buys two goods, x and y. The table below gives
You own a pharmaceutical company that is specialized in the manufacture of medicine for smokers. You newly patented an innovative drug called Clealung, which drastically reduces th
A company uses 2 inputs, K and L in its production function. The production function is given as where Q, K and L are in units per week. Price of input K per unit is RM100, and inp
Stable and Unstable Equilibrium An equilibrium is said to be stable equilibrium when economic forces tend to push the market towards it. In other words, any divergence from t
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