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If the price level depends on both the current money supply and future expected money supplies, in order to stop a hyperinflation, a central bank may try to establish credibility b
INTERDEPENDENCE OF MACROECONOMICS AND MICROECONOMICS In microeconomics, the underlying assumption is that the total output, total employment and total spending are given. It th
Marginal propensity to SPEND refers to: a. a nation's additional spending on a good per an additional unit of expenditure. b. a nation's additional consumption based on a unit incr
Suppose that a paper mill "feeds " a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. For example, the first unit o
determination of interest rate in classical model
After an oil price shock was impacted upon the other five variables in the model, many interesting results were found. I have already demonstrated that oil Granger causes i
DETERMINATION OF FACTOR PRICES BY SUPPLY AND DEMAND Let us suppose that perfect competition prevails in the goods and the factor markets. In such a situation let us see how th
Suppose the ABC chemical company discovers a drug that cures the common cold. ABC has plants in Europe and in the United States and can produce the drug in either continent at a ma
which turning point marks the end of an economic prosperity and the start pf contraction
We will continue with the familiar demand curve homework the previous section Let the market demand for goods be with a linear curve: (p =A q D /10), where it is known
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