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1.the AD curve represents at the same time the demand for goods, money and labor in the economy 2.in the AS-AD model, higher competition among producers leads to a medium run equil
Suppose a company is considering two investment projects. Both projects require an upfront expenditure of $30 million. The company estimates that the cost of capital is 10% and tha
The real interest rate Interest rates and inflation Suppose you have 1 million on 1st January 2008. A basket of goods and services similar to the CPI basket costs 100,000.
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
Q. Assumptions of the AS-AD model? The most significant change we make going from IS-LM model to AS-AD model is to allow P to be endogenous. As P was constant in IS-LM model, w
Government revenue, government spending and net exports G, NT and NX are exogenous variables in the classical model In the classical model (and
The government in the cross model Net taxes NT(Y) depends positively on real GDP in the cross model In this model when national income increase
Determinants of balance of payments: Broadly speaking, trend behaviour of merchandise exports and imports along with their terms of trade, net invisible earnings and autono
What is the difference between accounting profit and economic profit? Accounting Profit: The accounting profit of a business is the revenue of business minus the explicit
Q. Describe about Capital? By capital we characteristically mean manufactured goods which are used to produce other services and goods though aren't used up in the production p
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