Determine aggregate money demand
Problem: Describe the three main factors that determine aggregate money demand. Illustrate, with examples, how changes in these factors alter aggregate money demand.
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If I started with one equilibrium p* and went to another p* that had a higher price for X1, could the second p* be an equilibrium (using a Slutsky decomposition and keeping in mind the inferiority information supplied)?
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Describe the three main factors that determine aggregate money demand. Illustrate, with examples, how changes in these factors alter aggregate money demand.
An economist has estimated that, at the current price of $1.25 per pill, the own price elasticity of demand for the drug is -2.5. Based on this information, what can you do to boost profits? Explain.
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Task: Use demand and supply analysis with this statement: The economy is doing well in 2000. Income was rising and the stock market hit new record highs. As a result, the price of housing rose.
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