Explain how real GDP adjusts to achieve equilibrium expenditure.
Monopoly Equilibrium:In a monopoly market, there is a single seller or producer of a product or service. As a result, the equilibrium price is dictated by the seller, who has the power to set prices at a level that maximizes their own profit. Oligopoly Equilibrium:Oligopoly refers to a mar...
Explain the Quantity Theory of Money (QTM) pertaining to money supply and GDP. How does a fiscal policy affect the AS-AD curve? Lets say for example have an equilibrium output of 1600 and full employment level of 1200 meaning i have an inflationary gap of 400 so i might want to What ...
A free market is most efficient if prices are allowed to find a natural point of equilibrium. Too much intervention from the Fed can impede the price discovery process, making the market overly reliant on the Fed to solve every potential downturn with even more intervention. That can throw off...
Understanding Economies of Scale The size of the business generally matters when it comes to economies of scale. The larger the business, the greater itscost savings. Economies of scale can be both internal and external. Internal economies of scale are based on management decisions, while external...
Market Equilibrium: The price that a product aims for is to find equilibrium on the supply and demand curves in a marketplace. The price tries to maximize the profits made by sales by setting the price higher than costs, but low enough to compete with other products and maximize demand. Th...
We verify how national GDP, unemployment, inflation, credit rating, and interest rates help protect local firms. We also consider the role of a country's economic openness. Firms are connected globally through networks of suppliers and customers that may have had different exposure levels to the ...
For instance, the Barcelona European Council 2002 has brought consensus among EU members “to increase the average research investment level from 1.9% of GDP today to 3% of GDP by 2010, of which 2/3 should be funded by the private sector” (COM, 2003, p. 3). In particular, the ...
p= the rate of inflation y = the percent deviation between current real GDP and the long-term linear trend in GDP The equation assumes the equilibrium federal funds rate of 2% above inflation, represented by the sum ofp(inflation rate) and the “2” on the far right. ...
In contrast, negative shocks show long-term causal effects, which emphasises the vulnerability of the banking sector to oil price fluctuations. Geopolitical risk has a significant long-term impact on the MCGDP due to uncertainty shocks caused by regional and global geopolitical measures. For ...