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Problem: (a) Why is an error term added to a regression and explain its importance in the OLS procedure? (b) Suppose we have a linear equation with a constant term, one expl
Market equilibrium happens where supply equals demand (supply curve intersects demand curve). An equilibrium implies that there is no force that will cause further changes in pri
When the curve that envelops the sweries of possible short-run average total cost curves is horizontal, this means that they are a. economies of scale, b. dieconomies of scale, co
Economic Development The word development is from the Latin root ‘Voloper’ which meant wrap up, envelop. The English used this word along with ‘des’ meaning ‘undo’. The word
What barriers to economic growth can be explained using the Harrod-Domar model? Definition and outline of the Harrod-Domar model; growth in national income = savings ratio over
Government Policy Business Cycle Business cycles create instability in the economy. The period of boom or rising business activities is characterised by increase in output, emp
You are the final voter in a brand new start-up league, the Ultra Fun Foosball League (UFFL). The directors are looking to you to make the decisions on how many teams to place in a
Functions of money in any modern economy: A medium of exchange: Money facilitates the exchange of goods and services because, people exchange the goods and services they produ
There are two individuals in town, one is high risk and the other is low risk.1 The probabilities of having an accident for the low risk individual and high risk individual are p
Suppose the demand curve for a consumer for coffee is: Q = 6 – 2P, where Q represents the number of cups per day and P is the price of coffee per cup. Question: Suppose the
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