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Thinking about modifications in the model again: Go back to the original model again, but add a marginal propensity to invest, this is, suppose that I = f ( i and Y). The MPI is defined as ΔI/ΔY and has a positive value. Will this increase, decrease or not affect the value of the government expenditures multiplier? Describe!
Internal and External factors of business operation External factors : A firm can't exercise any control over these factors. Thepolicies, plans and programmes of the firm m
SHORT-RUN EQUILIBRIUM All firms are assumed to aim at maximizing profits or minimizing losses. The monopolist controls his output or price, but not both. The monopoly maxi
Income Elasticity The functional relationship among the changes in the quantity demanded for a good or service and the change in income of those persons demanding the good or s
Q. Show the example on transaction cost theory? Coase begins from standpoint that markets could in theory carry out all production and that what needs to be illustrated is th
BALANCE OF PAYMENTS The Balance of Payments of a country is a record of all financial transactions between residents of that country and residents of foreign countries. (Resi
Q. Central characteristics of Simon satisfying behaviour model? The pattern of policy commitments which result from the bargaining process can be seen to be a specification of
Open Market Operations The Central Bank holds government securities. It can sell some of these, or buy more, on the open market, buying or selling through a stock exchange or
Milton Friedman makes the demand for money a function of the real per capital permanent income. in this study the demand function for money is stated as; M/NPP= r( YP/NP) δ W
Q. Define Profit maximisation theory? Profit maximisation theory defines that firms (corporations orcompanies) will establish factories where they see potential to achieve the
explain how income flows in governed economy
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