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What are the advantages of leaving resource allocation to price allocation?
Ans) The 5 benefits are Neutral, Flexible, Freedom of choice, No administrative cost and lastly Diminished incentives. Distinguish among diminishing returns and diseconomies of scale. Diseconomies of scale I guess means as you make more it becomes more costly to produce. For example, you make output 1 for $2 but output 2 for $5 thus the second one needed $3 Now let us say input for output 1 had to be doubled for input 2. One land gave output 1. Output 2 required 2 lands. Then there are not diminishing returns. Though, as second land was costing $3 there was diseconomies of scale.
Explain how inflation unemployment trade-off is not feasible under adaptive expectation.MEC002
To overcome the stagnant growth it was experiencing for the past 10-15 years, Japan undertook which of the following measures? Answer Undertook programs to build infrastructure
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A sudden decrease in the growth rate of GDP will cause a change in: A. planned investment spending. B. unplanned investment spending. C. both planned and unplanned investment spend
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