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Employ the weights given below and suppose that 2002 is the base year with a CPI equal to 100. Suppose also that since 2002 the price of food has increased by 10 percent; the price
ORDINAL THEORY: INDIFFERENCE CURVE APPROACH In indifference curve approach consumer is assumed to be rational, so that consumer's objective is to maximise her utility by choos
To analyze the effects of discrimination in labor markets, use supply and demand curves for labor, with the demand curves representing the value of the marginal product, show the e
Let the real interest rate, i r , equal 5 percent and the rate of depreciation, d, equal 10 percent. In this case, if the price of a piece of capital is P K = $10,000, what is th
Q. Explain the Says Law? GDP, and Say's Law Aggregate supply Y S = f(L, K) in the classical model where L is concluded in the labor market while K is
What impact will high and variable rates of inflation have on the economy? How will they influence the risk accompanying long-term contracts and related business decisions?
Describe how exchange rate is expressed in some nation In some nations, exchange rate is expressed using home currency as base currency. In UK for instance, Danish exchange rat
The opportunity costs associated with the use of resources owned by a firm are: a. externalities b. implicit costs c. explicit costs d. sunk costs
How central banks increase the monetary base When the Central Bank cuts the target rate, they must simultaneously increase the monetary base by buying government securities. The
Q. Define the Prices and price level? Prices are of great significance in macroeconomics as undeniably they are in microeconomics. Though in microeconomics we are more interest
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