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Q. Nominal interest rate and expected inflation?
When we have inflation, we can't, of course, presume that expected inflation is zero. So real interest rate will no longer be equal to nominal interest rate and we should use R = r + pe. Expected inflation pe is exogenous (even though not essentially constant. In more advanced Keynesian models you would find numerous assumptions on how expectations are formed.
What is productivity? Productivity or average product (AP): It is output person which is output divided through number of workers AP= Q/L. There labour Productivity can
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in the keynesian cross assume that the consumption function is given by c=200+0.75(y-t). given planned investment is 100, government purchases and taxes are both 100. then what i
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Why might a perfectly competitive market firm be willing to run at a loss in the short run? The assumptions of a PCM firm should be outlined in order to end that the PCM firm i
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