Business cycle
What is meant by the term business cycle as described by economists?
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It refers to alternating increases and decreases in the level of business activity which is measured by the level of real GDP. The changes in activity levels are manifested in other variables like consumption spending, interest rates, consumer confidence levels, business confidence, unemployment levels, inflation rate, among many other indicators.
Use economic theory to explain the inflation movements and factors influencing it. Use relevant models to explain the impact of changes in fiscal and monetary policies in curtailing inflation.
What is the impact on income or output and price of excess demand (Inflationary gap)? Answer: In the condition of excess demand (that is Inflationary gap) there wil
Most economists believe such that people increase an activity when they perceive the expected additional benefits as exceeding the expected extra cost, but decrease their level of an activity whenever they believe the benefits from the last few units of the activity a
What points out zero primary deficits? Answer: Zero primary deficits signify that the government has to resort to borrowings simply to make interest payments.
Suppose the value of exports of goods of a country is Rs. 1,000 crores and the value of imports of goods is Rs. 1,200 crores, what will be the trade balance (or balance of trade)?
The consumer reaches equilibrium for any two goods X and Y whenever the: (1) MUx/Px = MUy/Py. (2) MUx/MUy = Py/Px. (3) Utility from X equivalents the utility produced by Y. (4) Point of diminishing returns is arrived at. Can someon
How prices allocate resources?
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Commonly agreed-upon normative goals of macroeconomic policy do not include: (w) high employment. (x) price-level stability. (y) redistributing wealth through the rich to the poor. (z) economic growth. Can someone
In the figure shown below, line T1 depicts a tax system which is: (1) Regressive. (2) Progressive. (3) Proportional. (4) Unbiased. (5) Recessive.
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