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.
‘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?’
Economists agree that inflation beyond a moderate rate is undesirable as it can often prove disastrous and therefore, it must be kept under control. Economists agree also that an appropriate mix of fiscal and monetary policies can be helpful in controlling inflation.
Explain the concept of “economies of scale” and “increasing returns”.
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
The usual household maximizes the utility by spending all its money to purchase and consume a combination of goods which yields: (1) Fundamental physiological requirements and customary wants. (2) Maximum status and the social prestige. (3) Complete satisfaction of al
Widely accepted normative macroeconomic policy objectives include: (w) full employment and economic development. (x) allocative, productive, and distributive efficiency. (y) maximum freedom and economic profits. (z) job security and equality within th
WHAT IS THE CHANGE IN EQUILIBRIUM gdp CAUSED BY THE ADDITION OF NET EXPORTS?
To begin with, let us recall our three-sector product-market equilibrium model given as C + I + G = C + S + TTo this three-sector model, we now add the foreign trade-the exports (X) and imports
Assume that you receive $18 worth of ‘jollies’ (that is, utility, satisfaction or pleasure) from the very first hole of golf played on a particular day, and that your extra jollies from succeeding the holes drops $1 for each and every hole played. You shou
What are the conditions through which the supply curve will shift?
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