1) The creation of the Permanent Income Hypothesis was generated out of the observed difference between short run and lo...
Homework Answers
Permanent income is then income that a person is expecting to receive in his whole lifetime such as wages salaries pensions etc. This determines the permanent consumption patter of the person suchnaa a house car etc whereas a transitory or short term income is the lotteries and bonuses which a person receives. The transitory consumption however also depends upon th permanent assests scuh as clothes and holidays etc. Henc permanent income hypothesis is a result of these long term and short term consumption behavior.
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1) The creation of the Permanent Income Hypothesis was generated out of the observed difference between short run and lo...
Explain the difference between permanent and transitory income. Which of the two is important for consumption...
Explain the difference between permanent and transitory income. Which of the two is important for consumption in the Friedman theory?
3) Explain the difference between permanent and transitory income. Which of the two is important for...
3) Explain the difference between permanent and transitory income. Which of the two is important for consumption in the Friedman theory? (7 points)
explain the difference between the short and long run
explain the difference between the short and long run
. Define and explain the difference between the long run and the short-run production functions. Why...
. Define and explain the difference between the long run and the short-run production functions. Why are short-run costs higher than costs in the long run? Why are the short-run average and marginal cost curves U shaped? What generates a U shape for the long-run average and marginal cost curves?
what is the difference between the short run and the long run equilibrium in the AD-AS...
what is the difference between the short run and the long run equilibrium in the AD-AS 6. The economy is in a deep recession. In order to close the output gap, the government is planning on sending a cheque (money) to all households. Explain the short-run and the long run impact of this intervention using the ADAS model. 7. Explain in plain words how the impact of the fiscal policy described above depends on the slope of the AS curve....
What is the difference between a firm’s shutdown point in the short run and in the...
What is the difference between a firm’s shutdown point in the short run and in the long run? Why are firms willing to accept losses in the short run but not in the long run?
5. Explain the difference between the long-run aggregate supply curve and the short-run aggregate supply curve
5. Explain the difference between the long-run aggregate supply curve and the short-run aggregate supply curve
How do macroeconomists typically define the difference between the “short run” and the “long run”? Is...
How do macroeconomists typically define the difference between the “short run” and the “long run”? Is the classical model of a closed economy (Mankiw, chapter 3) considered a short run model or a long run model? Why?
Talk about the difference between long-run and short-run. If you were a business owner, how would...
Talk about the difference between long-run and short-run. If you were a business owner, how would you apply these principles to make decisions about your business? You will need to define short-run and long-run from your own knowledge, explain the difference, and then determine what decisions you would have to make in time frames. You may use your Fortune 500 company if you like.
Consider the difference between the short run of a few days or weeks and the long...
Consider the difference between the short run of a few days or weeks and the long run of a few months or years. Suppose the price of gasoline goes up. How will the supply and demand curves be effected in the short run? What will happen to the equilibrium price and quantity of cars? In the long run, how would your answer to part f. change?
3) Explain the difference between permanent and transitory income. Which of the two is important for consumption in the Friedman theory? (7 points)
what is the difference between the short run and the long run equilibrium in the AD-AS 6. The economy is in a deep recession. In order to close the output gap, the government is planning on sending a cheque (money) to all households. Explain the short-run and the long run impact of this intervention using the ADAS model. 7. Explain in plain words how the impact of the fiscal policy described above depends on the slope of the AS curve....
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