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Explain the law of diminishing marginal returns using the example of a factory which is currently running at half capacity and employs more staff
Q. Explain function of AS-AD model? The function of AS-AD model is to extend IS-LM model so that we can analyze situations where Y > Y OPT . To achieve this, we should make P e
what are the three motives of holding money?
Steps to real wage rates to fall Wage 'stickiness' or wage inflexibility may stop the real wage rate falling to the full-employment wage rate. Stickiness or inflexibility is ca
Q. Show the example on IS-curve? Figure We can explain this argument with the above figure. 1. Start by identifying R 1 and R 2 in lower graph. 2. Draw aggr
Explain the Economic functions of money - A unit of account In a monetary economy, all prices may be expressed in monetary units which everyone may relate to. Without money,
the classical model assumes that consumption depends positively on disposable income. now suppose that consumption also depends on the real interest rate. a) sketch the loanable
The more certain private property rights are, a. the less people need to invest in education or human capital development. b. The less entrepreneurship there will be. c. t
barriers to entry?
THE MODEL BUILDING A model of individual or aggregate economic phenomena represents a simplification of real world economic complexities. It may be expressed in words, ta
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