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Monetary policy The problems concerning the ability of monetary policy to influence the economy, as for instance the doubts about the ability of lower interest rates to st
Point and arc elasticity of demand The elasticity of demand is conventionally measured either at a finite point or between any two finite points, on demand curve. The elasticit
Arguments against protectionism Most of the arguments for protectionism may be met with counter arguments, but underlying the economic arguments as opposed to the social, mo
Q. What is Internal Diseconomies of Scale? Internal economies of scale exist only up to a certain size of the plant. Size of plant is called the optimum plant size since with t
Let consider the economy (above) again where the following set of stocks is traded: x 1 =(2,2,0) x 2 =(1,0,3) x 3 =(0,2,4) for the prices (p 1 , p 2 , p 3 )=(1,
all theory
The pigou effect, also called the real balance effect, is named after the well known Cambridge school economist Arthur Cecil pigou who had first clearly formulated the relationship
Variable Costs (VC) These are costs, which vary with the level of production. The higher the level of production, the higher will be the variable costs. They are associated
Mankiw Model of Nominal Rigidities There are two related reasons for which firms do not frequently change prices. First, as we saw in the discussion on menu costs, the cost
gap between economic theory and business practice
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