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In multiple regression analysis, before testing the significance of the individual regression coefficients, (a) the intercept must equal 0. (b) the multiple standard error of the e
The market demand for a factor The market demand curve for any input is not simply the horizontal summation of the individual demand curves of all the firms. This is due to th
Suppose the economy is currently in recession, and the exchange rate if fixed using the IS-LM model. a) Explain and illustrate the economy adjustment (in the medium run) b) E
Individual A has UA(XA,YA)=lnXA+2YA and has $500. PX=5 and PY =10. (a) Find the optimum. Show that it is indeed the maximum. (b) PX=10. Find the new optimum. (c) Calculate
Suppose home cost pricing prevails in international trade, while world output is declining. Consider two economies, A and B, both having floating exchange rates and the same moneta
Table below shows the descriptive statistics which have been condensed from the data sheet for the period 1987 Q4 to 2011 Q3. GDP (%) Real Exchan
Separation of growth and fluctuation It is very useful to separate the evolution of a variable which grows over time into a trend and fluctuations around the trend. The graphs
Aggregate Supply (AS) We now shift our attention to the supply side of the macroeconomy. Aggregate supply explains the production and pricing side of the economy and the behav
The project has been split into four main chapters; literature review, data and methodology, results and a conclusion. The appendix contains the estimated tables and graphs, of whi
Buying government securities: When a commercial bank buys government bonds, the effect is substantially the same as that of lending - new money is created. To
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