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What is Economic Theory?
An economic theory that can be considered an axiomatic approach comprise a set of assumptions and circumstances, an analytical framework and explanations and/or predications as conclusions which are derived by the assumptions and the analytical framework.
As any science, economics is relate along with the explanation of observed phenomena and also creates economic predictions and assessments based onto economic theories.
Economic theories are improved to describe the observed phenomena into terms of a set of fundamental assumptions and rules.
Compensated Demand Curve: Compensated demand function for a commodity (say x1) of an individual consumer represents demand quantity for that good (which is purchased by the co
prove that the utility approach and the indifference curve approach yield the same consumer equilibrium
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limitations
How might a “perfect” macro equilibrium be affected by (a) a stock market crash; (b) the death of a president; (c) a recession in Canada; (d) a spike in oil prices?
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