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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
Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
Q. How to evaluate total savings? Total savings Total savings S(r) depends positively on the real interest rate Remember that total saving
It was observed that following a one standard deviation shock to the price of oil, interest rates rose sharply immediately afterwards reaching a maximum after two quarters. Then fr
Discuss about real verses nominal gross domestic product. Real verses Nominal Gross Domestic Product: Real Gross Domestic Product: the value of the concluding goods and se
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
use a numerical example to illustrate how credit multiplier works
the uses of production function
difference between gdp at market price and nnp at factor cost
Q. Determination of variables in AS-AD model? Once Y and P are determined, all other endogenous variables would be determined as well. Interest rate is determined by money mark
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