Surplus of AD over AS-Inflationary gap
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 employment level of employment.
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 employment level of employment.
In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?
In market economies, what are the signals which guide economic decisions?
The fact that most of the necessities for life like water are priced much lower than the frivolities like diamonds is addressed by the: (1) Utilitarian enigma. (2) Law of diminishing marginal utility. (3) Rational ignorance of hypothesis. (4) Paradox of the value. (5)
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
Does full employment take place if AD = AS or S = I?
What is the basic difference between Market Supply and Individual Supply?
Whenever longer periods are considered and hence bigger ranges of adjustments (that is, substitutions) become probable, demand curves tend to become: (i) Flatter, and therefore do supply curves. (ii) Flatter, as supply curves become steeper. (iii) Ste
What do you mean by the term Competitive market?
When speculators are right, their actions: (1) Cause already depressed prices to drop/fall further. (2) Raise the risks to another firm of doing business. (3) Prevent price refuses from their peaks. (4) Reduce both the phase of prices and their volatility across time.
Differentiate between APC and MPC. The value of which of them can be greater than another and when? Answer: APC is the average
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