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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. Suppose that S = -25 + .2Yd. How much would government spending have to be enhanced in order to accomplish the desired outcome?
Interest rates Decreasing the rate of interest may not encourage investment but increasing the interest rate tends to lock up liquidity in the financial system.
Shifts in the supply curve Shifts in the supply curve are brought about by changes in factors other than the price of the commodity. A shift in supply is indicated by an entir
Explain the demand for a commodity The functional relationship between demand for a commodity and its various determinants may be expressed mathematically in terms of a demand
Importance of Cross Elasticity Knowledge of cross elasticity is necessary when the government wants to impose a tariff on an imported commodity to protect a domestic industry.
law of demand
elasticity concepts occupies a central place in policy formulation explain in details
Q. What is Internal Diseconomies of Scale? Internal economies of scale exist only up to a certain size of the plant. Size of plant is called the optimum plant size since with t
The Social Cost of Unemployment i. For the individual, there is the demoralizing effect which can be devastating particularly when they are old. This is because as some
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example problems for the types of pricing
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