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Under specified assumptions, derive the square-root formula of the Baumol-Tobin's inventory model of transactions demand for money and briefly describe the effect of a one period increase in the price level on the demand for money. How would your answer change if real transaction costs decrease simultaneously with the one-period increase in the price level? Explain carefully and illustrate your answers with a diagram.
The monetarists have demonstrated that the early Keynesians were wrong in saying that money doesn't matter at all to economic activity. Therefore, we should accept the monetarist position that money is all that matters". Do you agree? Why? Why not?
what is the theory of supply
Halala is a small country that uses most of Its resources to produce fruits and vegetables. If the country produces only fruits it is able to produce 8000kg of fruit per year. If i
How do I draw and interpret a combined ppc curve?
Q. What do you meant by Retained Earnings? Retained Earnings: Business profits that aren't distributed to shareholders (by dividends or other pay-outs) thoughinstead are retain
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Dialectic Inquir y It is a technique for group decision making in which members are forced to "debate" both sides of a matter. Dialectic inquiry forces consideration o
1. Consider a model economy with a production function Y = K 0.2 (EL) 0.8 , where K is capital stock, L is labor input, and Y is output. The savings rate (s), which is define
Economic profit and Economic loss: Economic profit is the excess if total revenue over total cost when the latter includes both explicit and implicit costs. It is the type o
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If a minimum wage were imposed below the competitive equilibrium what would we expect to observe in the effected labor markets?
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