What is substitutes
Substitutes: The two goods for which a rise in the price of one good leads to a rise in the demand for another.
What are the four methods that FED can use to make money? What are the most powerful one and what technique the FED to create a gradual easing of the money supply either created or destroyed most seldom uses?
Distinguish between full-employment equilibrium and Under-employment equilibrium. Whenever equality among AD and AS is at full employment level it is termed as full employment equilibrium. Although whenever equali
Analyze at least 3 possible regions for the industry which could lead to transaction costs, explaining each in detail.
Redistribution of Income: Each and every economy strives to achieve a society, where inequality of income and wealth must be minimum. In order to attain this objective via government budget the government spends adequate money on social security schem
10 US dollars are exchanged for 500 Indian rupees. Calculate the exchange rate for Indian currency? Answer: $1 = 500/10 = Rs.50, that is, $1 = Rs. 50
What relationship does the MPC bear to the size of the multiplier? The MPS? What will the multiplier be when the MPS is 0, .4, .6, and 1
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
What relationship does the MPC bear to the size of the multiplier
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?
The Income effects will be most strongly positive for: (1) Normal goods. (2) Necessities. (3) Superior or luxury goods. (4) Substitutes and much negative for the complements. Find out the right answer from the above options.
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