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1.Classify each of the following as related to the transactions demand, precautionary demand, or asset (speculative) demand for money. Explain:
(a) Rodrigo keeps $200 in cash in case of emergency.
(b) Kay moves her funds to a new bank that offers higher interest rates on bank accounts.
(c) Ned keeps most of his income in cash or in a zero-interest checking account.
2. Why would the money demand curve turn vertical when interest rates are very high and households are holding very small money balances?
3. If equilibrium real GDP is less than full employment real GDP, what should the Fed do
(a) About interest rates?
(b) The reserve requirement?
(c) With securities?
Discuss the following in relation to China's market reforms: (1) the political and economic factors on the basis of which China decided to undertake market reforms; (2) how
What are the formal and informal sectors? Formal and informal sectors: Economic activities considered as to the government make up the formal sector of the economy. That
helloo?
QUESTION (a) Define a public good and discuss how free riding might be a problem in the provision of a public good. (b) What is the rationale for government intervention in
Why might the point at which the long-run average cost curve levels out change over long periods of time? include a diagram.
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Explain about theories and models linked to development. • There is no one agreed theory of development. All models, as Rostow, provide an insight in one or two dimensions of t
Suppose that historically, the proportion of people who trade in their old car to a car dealer when purchasing a new car is 48%. Over the previous 6 months, in a sample of 115 new-
Suppose that EBV is considering a $5m Series A investment in Newco. EBV proposes to structure the investment as 5m shares of CP with FV of $5m, one-to-one conversion to common, and
New trade theory
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