Define Quantity of a good
Quantity of a good: The quantity of a good which buyers demand is found out by the price of the good, income, the prices of associated goods, expectations, tastes, and the number of buyers.
Administrative revenue: Administrative revenueis the revenue which occurs on account of the administrative function of government. It comprise: (a) Fees (college/school) (b) License fees paid to obtain permission to carry out a service (c) Fines and p
The equilibrium interest rate is determined
Gross domestic capital formation is always greater than gross fixed capital formation
Elucidate the concept of deflationary gap. Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium
How does a commercial bank make money? Answer: Commercial banks are capable to make credit that is many times greater than deposits received by banks. Money creatio
When cost of a foreign currency increases its supply too increases. Elucidate why?
Firms which serve customers who vision the firm’s output as perfectly substitutable for the outcomes of huge numbers of other firms confront: (i) Horizontal (that is, perfectly price elastic) demand curves. (ii) Predatory pricing from greater mo
Question: Suppose firm 1 and firm 2 merge. Call the new firm A. It has output xA and profit πA. Suppose there is Cournot competition after the merger. For now, we assume that the marginal cost of Firm A, the mer
Substitutes: The two goods for which a rise in the price of one good leads to a rise in the demand for another.
What occurs to economy, when credit availability is limited and credit is made costlier? Answer: Aggregate demands falls
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