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Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66. If autonomous exports have just fallen by $20, what will happen to equilibrium income? What about unemployment? Show the adjustment process to the new equilibrium using a graph.
The total value of loan in an economy is Rs. 400 million and the reserve ratio is 20 per cent. An enhance of Rs. 15 million in the money which the public keeps in commercial ba
Determinants of balance of payments: Broadly speaking, trend behaviour of merchandise exports and imports along with their terms of trade, net invisible earnings and autono
What was the total public debt outstanding on the same day in 2000? What was it in 2008?
Determine the categories of finished goods Finished goods in the goods market are divided into 4 categories: private consumption going to private sector, public consumption for
What is gross domestic product Economic growth is most commonly calculated in terms of the annual percentage rate of change in real gross domestic product (GDP).
As people went from barter societies to more advanced economies, money had to be invented. Several things successively served as money in the course of economic evolution. Arrowhea
Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the
The demand function for Newton's Donuts has been estimated as follows: Qx = -14 - 54Px + 45Py + 0.62Ax where Qx represents thousands of donuts; Px is the price per donut; Py
Automobiles arrive at the Elkhart exit of the Indiana Toll Road at the rate of two per minute. The distribution of arrivals approximates a Poisson distribution. A) What is the prob
The U.K. produces and imports eggs. Suppose that the government imposed a quota on imports: Foreign suppliers could export no more than Q eggs (regardless of price). What effect do
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