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Q. Explain the classical motivation?
The classical motivation: Consumers want to smooth their consumption over time. In good times, consumers know that it is a temporary state. Rather than increasing consumption, they save and use their savings in bad times.
Figure: Classical and Keynesian consumption function
Determinants of balance of payments: Broadly speaking, trend behaviour of merchandise exports and imports along with their terms of trade, net invisible earnings and autono
using a graph of the classical labour market,illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage.what will eventually happen i
Definition of Money We should define what we mean by money. Money has a long as well as interesting history and an understanding of how we came to use money is useful for any
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Diagramatic explanation of pareto optimality
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Because discretionary Income = the money people have left over once they have paid for all of their basic needs (Food, Clothing, Shelter). You could also call it Disposable Inc
what are the types of exchange rate
Equilibrium in Money Markets Having dealt with the forces that determine the supply of money and demand for money, let us combine supply of and demand for money to determine eq
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