Microeconomics
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Harsher punishments for drug dealers than for addicts can’t be blamed for higher: (1) rates of police corruption because main dealers can present big bribes. (2) rates of street crime by addicts. (3) profits reaped by successful pushers who are uncaught. (4) rat
Question: Compare and contrast 'adaptive expectations' (Hubbard uses adaptive expectations) and 'rational expectations' in modeling expectations. Answer:<
‘The country is at present in recession and this has led to worse tax revenue and high expenses. The effect is a huge deficit. The government decides to increase taxes and lower government expenses. Is this an excellent idea?’
What occurs to economy, when credit availability is limited and credit is made costlier? Answer: Aggregate demands falls
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.
Define bank rate policy? How does it operate as a technique of credit control? Answer: Bank rate is the rate at which the central bank provides loans to the commerc
What occurs to aggregate demand if the government budget is in deficit? Answer: The deficit budget raises the aggregate demand since the deficit budget signifies th
what can be the minimum value of investment multiplier?
Devaluation means decrease in the external value of a country’s currency as an aware policy measure adopted by the Government of a country. In another words, we make our currency less costly in terms of foreign currency. This builds our goods ch
Consider a model economy with a production function Y = K0.2(EL)0.8, where K is capital stock, L is labor input, and Y is output. The savings rate (s), which is defined as
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