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Effective Demand The concept of effective demand is the logical starting point of Keynes Theory of Employment. Effective demand manifests itself in the aggregate expenditure of
Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for ea
Now suppose that the archery instructors need a license in order to charge for archery lessons. The license is free of charge, but there are only four licenses distributed. Assumin
Determine the categories of finished goods Finished goods in the goods market are divided into 4 categories: private consumption going to private sector, public consumption for
Q. Define market for overnight loans? The market for overnight loans Overnight interest rates are rates for loans over a single night - these are the shortest of all inte
Suppose new instruments for a firm cost $18,000 along with an additional installation fee of $2,000, both of that are depreciable. Complete the depreciation schedule display below
y explain whether you agree or disagree with the following statements. “If nominal GDP is less than real GDP, then the price level must have fallen during the year.”
Lucas’ point of view, what are the limitations of the Keynesian model? What improvements does he suggest?
1) Assume that the production function for New Zealand is given by Y = AK0.57L0.43, where Y is real GDP (in 2000 constant dollars), K is real capital stock, L is labour. The parame
A friend says that the economy will produce inside the PPF curve (like pt E below) since we in the economy value saving, or for some other reason. You say this is incorrect. Why? U
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