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Q. Describe the Theory of effective demand ?
Effective Demand:Theory of effective demand was developed separately in the 1930s by Michal Kalecki andJohn Maynard Keynes. It elucidates why capitalist economy is generally limited by the total amount of spending (which is, the economy is demand-constrained) and hence why unemployment almost always exists.
Five uses of elasticity on the Public Sector and five uses of elasticity on the Private Sector.
analyse the rise and fall in the price under market equillibrium situation?
the general characterictics of economic models,its limitations and verification
prefrence towards risk the demand for risky assets,
Gross Domestic Product, Deflator: A price index that adjusts the overall value of GDP according to average increase in the prices of all output. GDP deflator equals the ratio of no
Depreciation: This signifies the loss of value from an existing stock of real capital (for an individual company or for whole economy), reflecting normal wear-and-tear of machinery
Lynne’s income is $2, 000 and she is risk averse. The probability of someone slipping on her stairs is 1 8 . If this happens, she will be sued for $1, 000 and will have to pay that
Risk Aversion and Income - Variability in potential payoffs increases risk premium. - Example: A job has a .5% probability of paying $40,000 (utility of 20) and a 5 p
why diminish MRS?
Why does a price index based on constant weights tend to overstate inflation in periods after the base year when the price of one good is rising quickly compared to other goods?
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