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Describe the justification of the supposition of strong excess capacity in the Simple Keynesian model.
Differentiate between the marginal propensity to consume and average propensity to consume.
Assume that in an economy velocity of money is constant. The output grows by 5 % per year, the money stock grows by 14 % per year and the nominal interest rate is 11 %. Determine the real interest r
Represent a short exposition on the quantity theory of money. Recognize the suppositions related with it and interpret them.
Describe how the creation of credit by commercial banks can encompass multiplier effect on the money supply.
Comment on the utilization of discount rate and cash reserve ratio as the instrument of credit control.
Illustrate how money supply is associated to the stock of high powered money.
Differentiate between the ex-ante and ex-post real interest rate.
Describe the dissimilarity between the saving and investment as defined by the macroeconomists. Which of the given conditions represent investment or saving? Describe:
Make a model of the loanable funds market in a closed economy.
What do you mean by Government Budget Deficit? Explain how it affects the interest rates and private investment?
Illustrate the responsibility of intermediaries in the financial market?
Compute saving, investment and government spend.
Determine the value added in each phases of production? Find out the GDP?
Recognize which of the given purchases is counted as the part of NI:
Describe critically GDP as a measure of the economic welfare.
If price of the Navy submarine increases, is the consumer price index or the GDP deflator influenced? Explain why?
Illustrate the difference between the intermediate goods and final goods and services?
Inspect Don Patinkin's Real Balance Effect. Write down the ways and means to bring awareness regarding Global Warming.
Given the downward sloping demand curve and positive marginal costs, profit maximizing firms will always sell less output upper prices than will revenue maximizing firms.
Describe which of following transactions would be directly counted in the 2007’s GDP. In each case, illustrate whether the action causes a raise in Consumption, Investment, Govt. Purchases or
What is annual percentage discount or premium? If you’ve no other information regarding the two currencies, what is your best presumption about the spot rate on the rand three (3) months hence
On the graph, label the area of consumer surplus as f. Label the area of the producer surplus as g. If equilibrium price were $2, what would be the amount of the producer surplus?
If the present price and quantity is situated at the intersection of two demand curves, and competitors follow price diminishes but not price raises, show in the graph the relevant demand curve to c
In the long run, firms operating as pure monopolistic competitors and competitors will both tend to earn normal profits.