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Problem 1 : (a) What are the main assumptions behind the macroeconomic theory of New Classical Economists? (b) Describe the Lucas Supply function and explain its policy imp
Policies of Savings and Investment Policies to make sure that savers get reasonable rates of return on their savings have the potential to boost savings rate. Comparing systems
Consider 2 firms i=1,2 producing quantities q1 and q2 respectively. Let the market price be given by P=a-b(q1+q2). Firm 1''s Marginal cost c is common knowledge but 2''s cost is no
State about the prices - Price level Prices are of great significance in macroeconomics as indeed they are in microeconomics. Though, in microeconomics we are more interested i
what is the theory of second best? prove the theorem with the help of a diagram.
Problem: a) What factors would you consider when analysing the digital economy relative to e business? b) "The growing use of the internet by consumers and businesses has re
Compensated Demand Curve: Compensated demand function for a commodity (say x1) of an individual consumer represents demand quantity for that good (which is purchased by the co
Profit: This is surplus left over after a company sells its output and pays off cost of production (which includes raw materials, labour costs and a proportional share of its capit
Policies for Technological Advance Without better technology, increases in capital stock generated by investment rapidly run into diminishing returns. And without improvements
• Production Function . The factors of production have to be combined in a particular manner to produce a certain product. Think of baking a cake which involves mixing fixed propor
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