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In 2009, ABC Company made $2M of net profit and spent $100,000 on advertisement. In 2010, it made $2.5M of net profit and spent $150,000 of advertisement. Based on this information, if ABC's advertisement expenditure increases by $20,000 in 2011, how much do you expect its net profit to increase? Explain why the ratios of net profit to advertisement expenditure in 2009 and 2010 are different from the slope of the net profit advertisement relationship.
THE GOALS OF MACROECONOMIC POLICY Economic analysis attempts to explain why problems arise in the economy and how these problems can be dealt with. It is, therefore, indispens
Q. What do you mean by Wage inflation? We will develop the Keynesian model removing the assumption of fixed nominal wages. We state wage inflation p w as the percentage averag
THE MULTIPLIER ANALYSIS Multiplier analysis explains what happens to circular flow of economic life when the behavior of one of the sectors or the components of aggregate dema
Select a particular public policy with which you are familiar and discuss two positive and two negative aspects of that policy. b. What goal do you think the policy makers were try
The Government, Rest of the World and the financial markets total expenditure of government can be divided into two parts: transfers to private sector and consumption.
Suppose that between January 2011 and January 2012 the total number of people employed and the unemployment rate both fell. Briefly explain how this is possible. [2 marks]
Q. How to evaluate total savings? Total savings Total savings S(r) depends positively on the real interest rate Remember that total saving
equilibrium in money market and derivation of lm curve
what are the factors effecting reciprocal demand?
Q. Demand for money for AS-AD model? The money market The demand for money depends negatively on R,positively on Y and positively on P in AS-AD model
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