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Q. Explain why one can write the demand for money as follows: Md = P L (R, Y) Answer: The collective money demand is proportional to the price level. Imagine that every prices
Economic Theory 1. Explain the procedure of factor price determination under imperfect competition. 2. Discuss the Wage Fund Theory of Wage Determination. 3. Explain the
In the Ricardian analysis, why does each trading partner have an incentive to produce at an endpoint of its production-possibility frontier? Why are prices of factors of production
"Although the price levels appear to display short-run stickiness in many countries, a change in the money supply creates immediate demand and cost pressures that eventually lead t
Q. Given the opportunity to sell at world prices, the marginal (opportunity) cost of selling a ton domestically is what? Answer: $5/ton.
Q. Explain the difference between the following two expressions: Y = C(Y d ) + I + G + CA(EP*/P, Y d ) and Y = C + I +G + CA Answer: The first expression corresponds to a
Q. Using the GG - LL framework, analyze the effect of an increase in the size and frequency of sudden shifts in the demand for a country's exports. Answer: Such a alter pus
different between her barter terms of trade and net barter terms of trade
(a) Consider there are two countries (country 1 and country 2) with two goods (X and Y). Further, under the assumptions of the Ricardian model, country 1 specialise in goods X. De
Q. Consider, as a result of several dynamic factors associated with exposure to international competition, Albania's economy grew, and is now shown by the rightmost production pos
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