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Suppose a major brokerage firm advised its clients to buy cigarette stocks under the assumption that, if consumer incomes rise by 50% as expected over the next decade, cigarette sales will double. What is your reaction to this investment advice?
Q1. A company selling widgets advertises through three types of media: print, television and internet. Recently the company has decided to increase its advertising budget by $100,0
Overnight target rates and inflation One of the major targets of every central bank is a low and stable inflation. Its main control variable is the overnight interest rate tar
Q. Show the equations of the AS-AD model? The equations of the AS-AD model To précis the AS-AD model, we can have a glance at its equations. IS-LM model was "solved" by s
Q. How to control Monetary policy? Remember that the money supply is equal to the money multiplier times the monetary base. We will presume that money multiplier is constant an
Christina Romer and Jared Bernstein in "The Job Impact of the American Recovery and Reinvestment Plan" calibrated the impact of the proposed expansionary fiscal policy (we know it
Balance of Payments All countries have economic transactions with other countries. These consist of import and export of goods and services, official and private gifts and don
What are the differences between perfect competition and monopoly competition? Ans) In a monopoly, you are gaining an unfair benefit over any competition because you own so many
Explain the meaning of a production possibilities curve
EXPLAIN THE 5 SECTOR MODEL (OPEN ECONOMY) IN INCOME DETERMINATION
What are the crisis affect the economies This crisis would affect the UK in 3 major ways. First the UK would be unable to sell its exports to these economies if they are hea
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