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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.
Explain the term- inventory investment We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciat
In January of 1997, the U.S. Consumer Price Index (CPI) stood at 159.1. By January of 2008, the level had risen to 211.1. What was the average annual rate of inflation over this ti
You decide to buy a home for $1,000,000. You approach two banks for financing. The first requires a 10% down payment and requires monthly payments on a 20 year mortgage sufficient
how to make project
Briefly explain the dynamics of the 2007 financial crisis in terms of adverse selection and moral hazard.
A public good: A) Generally results in substantial negative externalities. B) Can never be provided by a nongovernmental organization. C) Costs essentially nothing to prod
It refers to the study of feasibility of a project in terms of its total economic cost and total economic advantages. It means to compare total cost with total advantage if we
The _______________ illustrates the notion of opportunity cost. If an economy is fully utilizing its resources, it can produce more of one product only if it produces less of anoth
Q. Explain about Household savings? Remember that consumption may refer to observed consumption as well as to demand for consumption. The same is true for 'household savings',
Describe the relation of money with wealth and income It is very possible to have a high income but no money and no wealth, or to be very wealthy and have a lot of money but no
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