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How would the price mechanism decide resource allocation in a competitive (free) market?The main issue it to explain how the price mechanism has a signalling, rationing and incentives function for the actors on a competitive market, creating equilibrium on the market and allocating resources in different markets.
The economic model forecasting involves estimating several simultaneous equations which are generally behavioural equation mathematical identities and market clearing equations. T
demand for risky assets
Risk Aversion and Income - Variability in potential payoffs increases risk premium. - Example: A job has a .5% probability of paying $40,000 (utility of 20) and a 5 p
Why some country saving less and consumption more?
diagram of extension and contraction in demand?
Model in economics is the permanent income hypothesis, which basically states that a household''s expenditures will not react to a change in income unless that change in income is
Static and dynamic multgipier
The Nature of Policy-Making : It follows that recommending policy must itself be a subjective exercise. The effects of particular-policies at a particular historical juncture
Inflation-Unemployment Trade-off under Rational Expectations : Robert Lucas (1972) pointed out another implication of the above hypothesis of adaptive expectations. Suppose in
what is direct utility in micro economics?
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