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Explain the apparent paradox that saving money is good for the individual but might be bad for the economy. Considering the circular flow diagram how is this relevant to public policy today?
Stocks and Flows When studying economics, one must be sure whether the variable being studied is a stock variable or a flow variable. Failure to do so can cause faulty economi
AD-curve, just like before, displays combinations of Y and P where both goods market and money market are in equilibrium. At any given instance, even when we have inflation, aggreg
critically examine Keynesian theory of employment?
A seafood restaurant in a beach resort town has a fixed (unavoidable) cost of $1,000 per month and variable (avoidable) costs of another $1,000 per month. Its total revenues over t
Suppose that the quantity theory of money holds & the velocity of money are constant at 5. Output is fixed at its full employment value of 10,000 & the price level is 2. a) Ver
Q. Overnight interest rates targets and money supply? There are many ways to explain the significant connection between overnight interest rate target and money supply. We will
Christina Romer and Jared Bernstein in "The Job Impact of the American Recovery and Reinvestment Plan" calibrated the impact of the proposed expansionary fiscal policy (we know it
Incentives Incentives designed to increase effort, reward enterprise and encourage saving and investment include: an emphasis on the effect of a reduction in the margi
Suppose the price of Twinkies decreases from $1.45 to $1.25 and, as a result, the quantity of Twinkies demanded increases from 2,000 to 2,200. Using the midpoint method, the price
circular flow of national income?
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