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Basic textbook models, such as the Mundell-Fleming model, say that capital inflow happens due to the domestic interest rate being higher than the world interest rate, and therefore capital inflow. So according to this model, it can lower interest rates so that interest rates stabilize to the world interest rate. Though, there is a checklist that requires to be ticked off and this checklist is like a chain, for example if domestic interest rates are high then there is going to be capital inflow, the domestic money will appreciate due to the enhance in demand for the currency, therefore Net Exports will decrease until exchange rates have stabilized.
Explain about Pragmatic Managerial economics is pragmatic. In pure micro-economic theory, analysis is performed based on certain exceptions that are far from reality. Though in
It can be geometrically proved that two elasticity are equal, which is., QB=RD Let's first consider ΔAOB. If we draw a horizontal line from point Q to intersect the vertical axis a
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critically analyze the of profit maximization
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Q. Explain Mark-up pricing? In addition to using above methods to conclude a firm's optimal level of output, a firm can also set price to maximise profit. Optimal markup rules
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