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QUESTION
(a) Explain the real business cycle theory.
(b) Using appropriate diagrams differentiate between inflationary and deflationary gaps.
(c) Differentiate between the Life-cycle theory and the Permanent income theory of consumption and saving.
Assume the firms cost function is: C(Q)= 100+10Q+Q^2 , Determine whether this industry is a natural monopoly when the demand function is: 1) D(P)= 100-3P 2) D(P)= 90-3P 3) D(P)= 10
(a) Assume that Purchase Price is equal to initial Market Value (b) Your Market Rent starts at the indicated level and increases by this factor for all of Year 2 and for each y
Question 1 ‘The consumer is always king in the market place'. Critically examine this statement, highlighting the existence of market imperfections. Question 2 (a) Dis
How do we identify if an institution or development policy works? Institutions and policies have goals. Successful policies and institutions meet stated objectives in a specif
Can national income figures be used to make comparisons of standard of living among countries? National income measures the Gross Domestic Product of country and therefore can
Define advocates of the International Monetary Fund argue. Advocates of the International Monetary Fund (IMF) argue • Competitive devaluations were a characteristic of the i
QUESTION a) Differentiate between returns to factor and returns to scale. b) In the long-run the Average Cost Curve is u-shaped. Discuss c) Whenever a firm is making loss
A clinic uses doctors and nurses optimally and is servicing the maximum number of patients given a limited annual payroll. The last doctor hired treated 1,600 extra patients in a
Flexible exchange rate system: A country is linked to other countries through two broad channels: trade flows andfinancial flows. Trade flows pertain to movement of goods and
Ask question #. Explain why under fixed exchange rates the monetary policy is not effective#
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