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Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential to increase the level of aggregate income to $760 billion. Assume that S = -25 + .2Yd. How much would taxes have to be cut in order to accomplish the desired outcome?
Suppose that the price elasticity of demand for cereal is -0.75 and the cross-price elasticity of demand between cereal and the price of milk is -0.9. If the price of milk rises by
INSTRUMENTS OF CREDIT CONTROL The central bank employs several instruments to control aggregate credit in the country. While some instruments like the open market operations mi
Q. Explain Mark-up pricing? In addition to using above methods to conclude a firm's optimal level of output, a firm can also set price to maximise profit. Optimal markup rules
what are the examples of the types of elasticity (price,income & cross elaticity
The elasticity of a demand curve is frequently judged by its appearance: the flatter the demand curve, the greater the elasticity and vice versa. However this conclusion is mislead
Explain cost output relationship with reference to: a. Total fixed cost and output b. Total variable cost and output
LONG RUN OUTPUT In the LR whether or not the firm makes profit will depend on the conditions of entry. For example, when surplus profits exist, there will be new entrants bec
theory
Using Total Expenditure for Calculating National Income The expenditure approach centres on the components of final demand which generate production. It thus measures GDP
principles of time perspectives
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