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Inflation-Unemployment Trade-off under Rational Expectations : Robert Lucas (1972) pointed out another implication of the above hypothesis of adaptive expectations. Suppose in
explain the marginal produtivity theory
The drawbacks of a mixed economy actually depend on how "mixed" it is. For instance, if it is mixed more towards a free-market, there is little regulation (some may see this as a g
PRICE ADJUSTMENTS UNDER FIXED EXCHANGE RATE: In a flexible exchange rate regime trade deficits (surpluses) are automatically corrected by a depreciation (appreciation) of a co
The Budget Line The line BB gives the persons budget constraint. It is described by the linear equation c + wl = w; which can be rewritten as c = w - wl: The budget li
How has the Harberler''s theory of opportunity cost an improvment over the classical theory of trade?
causes for emergency of monopoly
Find the highest interest rate: There are 2 entrepreneurs, Sally and Paul. The return to their projects are given by: To finance the project, each entrepreneur needs
Determine the oldest ideas in economics One of the oldest ideas in economics is that increases in technology certainly run into natural resource scarcity and so lead to increas
Real and nominal GDP, GNP, and Intrest rates, Stock & flow variables, Disinflation, Inflation rates, unemployement rates, labor force, participation rate, output per person, GDP d
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