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Q. Show the investment function in the IS-LM model?
The investment function in the IS-LM model
Investment was an exogenous variable in cross model owing to the fact that interest rate was exogenous. Now that interest rate is endogenous, investment will be endogenous. As for classical model, investment relies negatively on the real interest rate but then since R = r in the IS-LM model, we can make investment a function of R: I = I(R).
how the theories of trade cycle affects in the business
What is productivity? Productivity or average product (AP): It is output person which is output divided through number of workers AP= Q/L. There labour Productivity can
Define the tools of Competitive market. Competitive market: The supply and demand model a. The demand curve b. The supply curve c. Factors which cause the demand cu
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HOW INCOME TERMS OF TRADE DIFFER WITH COMMODITY TERMS OF TRADE"
Joe has preferences over pizza (p) and beer (b) given by U = pb. The marginal utilities are MU p = b and MU b = p, and Joe's income is I = 60. 1. Find Joe's optimal consumptio
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