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RATIONAL EXPECTATIONS AND ECONOMIC THEORY : We assumed above that the role of economic theory is not to provide quantitative predictions about the future. Suppose we assume ins
THEORY OF CUSTOMS UNION: A customs union is an association of two or more countries to encourage trade. The countries making such an arrangement agree to eliminate tariffs and
what is the theory of supply
Government Spending Wagner's Law of economic activities applies to every economy. According to this law, there is both an extensive and intensive increase in government activit
Objectives of the WTO: The agreement establishing the WTO reiterates the following objectives of the WTO: • Raising standards of living and incomes, ensuring full employm
If the marginal product of labor is 45 units of output and the marginal products of capital is 56 units of output while the wage rate is $20 per worker and the cost of capital is $
Consider a non-renewable resource. There are two periods, now and later. The demand curve in each period (t = 1, 2) is Qt = 10 - Pt. The stock of the resource is 10 units. Extracti
The availability of credit and hire purchase facility tends to push up the demand for consumer durables. In India for consumer durables lie Refrigerators television scooters etc, h
THEORY OF INTER-TEMPORAL CONSUMPTION: In the previous two units, we have been concerned with choices among contemporaneous commodities. An important class of choices made by c
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