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Q. Describe the Keynes motivation? Keynes' motivation: In good times, when Y is high (above its trend), national income is high (above it trend). Consumers will take this opp
Consider the following homogenous difference equation: xt=b0+b1xt-1 a) Iterate backwards xt can be written in terms of xt-2. b) Now show xt can be written in terms of xt-3 a
Q. Explain AS-AD model and inflation? Even though AS-AD permits changes in the price level, it doesn't allow for persistent inflation or deflation. We can't have continued decr
Give examples of a monopoly and an example of perfect competition. Explain how each of your examples matches the textbook's definition of that market structure. Monopoly-a firm tha
If the price of a good rises, what are people likely to do? a Substitute a less expensive good b Buy more of the good c Buy more of all goods because of added buying power d All of
if the price elasticity of demand is computed for two products, and product A measures .79 , and product B measures 1.6 , then ? a. product A is more price elastic than product
Consider a market where supply and demand are given by QXS = -18 + PX and QXd = 90 - 2PX. Suppose the government imposes a price floor of $41, and agrees to purchase any and all un
Q. Explain about IS-LM-model? The key difference between the IS-LM model and the cross model is that nominal interest rate is exogenous in cross model on the other handit is en
Unemployment classification Economists sometimes differentiate between different types of unemployment. There are many type of ways of classifying unemployment however the foll
Overnight target rates and inflation One of the main targets of every central bank is a low and stable inflation. It's main control variable is the overnight interest rate targ
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