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Q. Explain the labor market in the cross model? In cross model, both P and W are exogenous andconstant. Hence real wage is constant and it is not essentially equal to the equil
Q. Consumption function in the AS-AD model? Consumption. Suppose that P increases by say 10% whereas real GDP (Y) is constant. Nominal GDP and nominal national will now have
Demand: Demand is quantity of a good buyer who wishes to purchase at each conceivable price. The law of demand explains us that if the price of certain commodity increases,
Explain why we cannot measure the national product simply by adding up the production of all firms. Why do the economists use real GDP rather than nominal GDP to gauge economic
Q. Describe Exports and imports in AS-AD model? Exports and imports. This is more difficult to justify owing to exchange rate. Suppose that we have a flexible exchange rate a
what is meant by PPF?
We have been looking at just the Additional Marginal Opportunity Costs of our choices. What about the total cost? For example, we see and hear ads all the time about different cell
According to the imperfect-information model, when the price level is greater than the expected price level, output will _____ the natural level of output A) be greater than
what causes a shift in the balance of payment?
The price and quantity of lumber and other building materials has gone up recently. Show graphically and explain what might have caused this.
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