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The consumer maximizes the utility whenever spending patterns causes: (i) Total outlays to increase each time prices are altered. (ii) Marginal utilities of each and every good consumed to be equivalent. (iii) Marginal utilities from the last cent spent on each and ev
Equilibrium quantity: It is the quantity supplied and the quantity demanded at equilibrium price.
Illustrate, why is tax not a capital receipt?
Does a surplus of AD over AS always entail a condition of inflationary gap? Answer: No. Inflationary gap takes place only if AD > AS equivalent to full employmen
What relationship does the MPC bear to the size of the multiplier
To begin with, let us recall our three-sector product-market equilibrium model given as C + I + G = C + S + TTo this three-sector model, we now add the foreign trade-the exports (X) and imports
What is "demand-pull" inflation?
If the liability to give a tax is on one person and the burden of tax fall on some other person, state the kind of tax? Answer: These are indirect taxes like sales
How Bank rates control the credit? Answer: Bank rate is the rate of interest at which the Central bank lends to Commercial banks. By increasing the bank rate centra
What happens when AD > AS past to full employment level of employment?
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