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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.
Why do state approaches work into promoting development? State planning and intervention is desirable due to the shortcomings of markets. The approaches range of state through
What are state approaches to developing? The government supposes responsibility for economic planning to attain the best possible utilize of scarce resources. An economic plan
define scarcity and opportunity cost? what role these two concepts play in the making of decision making?
How can the size of shadow economy estimated? The size of the shadow economy is estimated when activity is undeclared as the amount of informal activity can be calculated: a
Explain, using the example of museum visits, own price, cross-price and income elasticity of demand; consider own price elasticity for various demographic groups. Use diagrams wher
explain how inflation could reduce the efficiency with which prices allocate resources.
Problem 1: (a) Define the concepts of production-oriented capitalist system and market-oriented capitalist systems. (b) With set examples, explain how these firms behave
What is structural change? Structural change: Structural change arises while the associate share of GDP and employment accounted for through the primary, secondary and te
Demand uncertainty, particularly in the fast fashion industry, is a significant factor. For this reason, María, the Supply Chain Manager of The Fast Fashion Group (FFG) has decided
Assume the marginal propensity to consume (MPC) is 0.9. Starting from equilibrium, investment demand enhances by 50. How much does equilibrium income enhance? Show the calcul
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