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Relation between nominal interest rate, real interest rate and inflation
If we denote the nominal interest rate by R, the real rate by r and the expected inflation by pe then the real interest rate is defined by:
r= R- pe or R= r+ pe
What are the important tools of making decisions? Making Decisions: a. How economists model decision making through individuals and firms b. Implicit costs and Explicit-C
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Which is better meausute of welfare?
Suppose the utility function is given by: u(x,y) = 3x+4y. What kind of goods are X and Y and what is the MRS?
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