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How is economics works with interaction of individual choices? Principles behind the interaction of individual choices: 1. There are gains through trade. • Specialization
What impact will an unanticipated increase in the money supply have on the real interest rate, real output, and employment in the short run? How will expansionary monetary policy a
Whenever real GDP declines, nominal GDP must also decline
In order to observe the correlations between each variable, the most effective method to use is Vector Autoregression (VAR). VAR estimation uses a system of simultaneous equations
What are the contents in the market strikes back? a. Price controls • Price ceiling • Price floor b. Quantity controls quota c. Excise tax d. Inefficiency
Burwood Mining is raising capital of $500,000 for its next project from the following sources: Sources Amount $ Common stock 100,000
Q. Consumption function in the AS-AD model? Consumption. Suppose that P increases by say 10% whereas real GDP (Y) is constant. Nominal GDP and nominal national will now have
Describe the Structural unemployment Individuals who are unemployed as their skills are no longer in demand where they live. This kind mainly results in longer spells and may r
Explain, using the best framework you can think of (based on our class discussion), the effect of a large federal deficit on interest rates.
What is the price elasticity of supply? Price elasticity of supply: The price elasticity of supply is a measure of the receptiveness of the quantity of a good supplied to pr
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