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Q. What do you mean by Price index? Because we are only interested in percentage change of the price level and not particular value, we can divide every price level by a given
explain the model
comparison between neoclassical factor endowment theory of international trade and classical labor cost theory of comparative advantage
If there are economies of scope and if the price for each product equals marginal cost, is it possible for a firm to cover all its costs? If the firm's average cost of production d
Q. Consumption function in the AS-AD model? Consumption. Suppose that P increases by say 10% whereas real GDP (Y) is constant. Nominal GDP and nominal national will now have
Question : The long-run position of an economy is described by the quantity theory of money: M/P = L (Y, r) Where M: nominal money stock; P: price level; Y: real income a
what is real and norminal interest rates?
If you have $10,000 to start a lawn-cutting business, the interest rate is 6 percent, your annual cost of raw materials are $4,000, and the earnings you sacrifice from working at a
A change in government purchases of goods and services results in a change in real GDP equal to $200 million. Assume the absence of taxes, international trade, and changes in the a
To determine whether high blood pressure affected whether a person had a stroke, a sample of 129 people who had had strokes are examined. In the sample, 39% had high blood pressure
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