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Financing of the external payments deficit: The trend in India's widening CAD during the second half of the eighties, both in absolute terms and also as a proportion of the
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
Q. Construction of real gross domestic product ? To be able to make reasonable comparisons of GDP over time, we should adjust for inflation. For instance, if prices are doubled
The rest of the world in the cross model Imports Im(Y) depends positively on Y in the cross model In the classical model, imports doesn't depen
law of indefference curve
Historically, shifts toward a more expansionary monetary policy have often been associated with increases in real output. Is this surprising? Why or why not? Can an expansion in th
Q. Why GDP is determined only by aggregate demand? Note that we haven't said anything about the aggregate supply so far. In order to justify why GDP is determined only by aggre
Suppose that the desired capital stock is given as: K* = 0.3Y/i r Where Y = GDP, and i r is the real interest rate. Suppose further that Y = $5 trillion and that i r
In 2007, the potato chip industry in the Northwest was competitively structured and in long-run competitive equilibrium; firms were earning a normal rate of return and were competi
effects of a real wage existing in the market that is lower than the equillibrium real wage. what will eventually happen in this labour market if it is perfectly competitive
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