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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?
Discuss MO theory in detail?
Explain the difference between a change in quantity demanded and a change in demand. Change in quantity demanded" refers to movement with the demand curve. For instance, if th
What does the IS-LM framework mean? The IS-LM model helps us to understand the two opposing theories. The IS (investment/saving) curve shows equilibrium in product markets. Th
herberler theory of opportunity cost
Time is a significant determinant of price elasticity. If a price changes, it might take consumers a certain amount of time to discover alternative lifestyles or commodities to ac
International economic relations also depend, in large calculate, on monetary =issues. You are unlikely to accept the Turkish Lire in payment for your wages in this country, easil
What are the properties of indirect utility function? Properties of the indirect utility function: While u(x) is continuous and monotonic onto R L + and (p, m) > 0, the in
Igora''s pizzeria want to know if it should stay open this spring. Total Revenue will be $ 12,000 per week and Total Cost will be $ 18,000 per week. The fixed cost of running the b
discuss the methods used by the malaysian government to slow down import growth.
causes and effect of the unemployment
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