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1. Consider a world with two assets: a riskless asset paying a zero interest rate, and a risky asset whose return r can take values +10% or –8% with equal probability. An individua
The Money Multiplier is explained below: If you see carefully, the money multiplier is nothing but an inverse of a reserve ratio. Therefore, we can write MM = 1/rr, where rr is
short run equilibbrium
Before explaining returns to scale it will be instructive to make clear the distinction between change in the scale and changes in factor proportions. The difference between the ch
using the basic Keynesian model answewr the following parts carefully using the relevant diagrams. what happens to the equilibrium level of GDP(Y) given the following: a) a reducti
if the inverse demand curve is p=120-Qand the marginal cost is constant at 10, how does charging the monopoly a specific tax of 10 per unit affect the monopoly optimum and the welf
There are different reasons for state trading. Important reasons are given below. (i) State may directly buy the goods required by the various government departments and agencie
V alue Chain It is the collection of activities within an organization that allows it to compete within an organization. The activities in a value chain can be grouped into
More details on mixed bundling
marginal utility is applied on money or not
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