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KEYNES' THEORY AND EXPECTATIONS:
Expectations played a major role in Keynes' theory of the determination of aggregate output and employment in market economies in the short run. Expectations about future yields on investment projects underlie 'the marginal efficiency of capital' schedule. However, the volatile nature of these expectations plays a major role in explaining why investment expenditure and therefore output and employment in market economies are subject to fluctuations.
disadvantages of monopsony
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Conventions as a Basis for Forming Expectations : Since there is little objective basis for probability distributions about future yields, decision-makers have to act on the ba
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