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Q. Explain Reversed Say's Law?
In the cross model, supply should instead follow demand. Cross model not only rejects Say's Law, it turns it entirely upside down. In the cross model 'demand creates its own supply'.
Just as Say's Law is criticized by many economists, there is criticism of this reversed form of Say's Law. Firms passively produce exactly what consumers want. If there is an increase in demand, firms would just produce this extra quantity. Motivation for this behaviour by the firms is further analysed when we describe the labor market in the cross model.
How does the Ricardo Viner diagram react when once price changes, effects on real wages, and labor allocation?
1. Assume the required reserve-deposit ratio is 12%, and the currency-deposit ratio is 38%. How much would money supply change if the Fed made open market purchases of $100 millio
WHAT IS THE SHAPE OF AGGREGATE SUPPLY CURVE IN COMPLETE KEYNESIAN MODEL
what is static and dynamic multiplier in keynesian theory?
If there is an increase in the popularity of video games and more companies making video games, then the following is true? A) Sales of the games will be uncertain. B) Price will g
assume the cost of a market basket in 2008 is 1717.0. Calculate the cost of the same basket of goods and services in 2007. Price index in 2008 was 100 and price index in 2007 was
Explain how inflation unemployment trade-off is not feasible under adaptive expectation.MEC002
Is it true that government revenues are increased because of lower tax rates? Ans) It is true to a point. The Laffer curve determines that revenues enhance as the tax rates rise
You should now find a press release from the Board of Governors of the Federal Reserve System, dated December 16, 2009, which discusses the decisions of the Federal Open Market Com
Q. Money market in the AS-AD model? goods and the money market in the AS-AD model We begin by studying goods market and money market when prices are no longer constant. Fi
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