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    (Original post by Tyrotoxism)
    Interestingly; some American economists are recommending that if things get much worse, financing public spending through printing money is a viable option. The argument is that increased inflation would benefit debtors, asset prices and public finances - healing the wounds from past price falls. Cuts in the base rate and fiscal stimuli would have similar inflationary effects anyway, and the drop in commodity prices only serves to fuel the argument.

    Obviously not an idyllic solution, but one that's becoming more of a possibility in times of a liquidity trap.
    Yes that is very interesting. But I think that governments would far prefer to turn to fiscal stimulus (despite a resultant increase in national debt). Having said that, if the recession were to undermine aggregate demand so much as to run the real risk of persistent deflation, it may be difficult to find a suitable alternative.

    Do you not think Britain is probably some way off being faced with the liquidity trap; given that the base rate is now 3% I should imagine there would be further room for rate cuts after an expected post-January retail sales slowdown?
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    (Original post by Economist1)
    Yes that is very interesting. But I think that governments would far prefer to turn to fiscal stimulus (despite a resultant increase in national debt). Having said that, if the recession were to undermine aggregate demand so much as to run the real risk of persistent deflation, it may be difficult to find a suitable alternative.

    Do you not think Britain is probably some way off being faced with the liquidity trap; given that the base rate is now 3% I should imagine there would be further room for rate cuts after an expected post-January retail sales slowdown?
    Sorry; I was referring to America (1% rate) with the liquidity trap comment. I too agree that printing money should be a very last resort - but one it increasingly looks like we may use.
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    (Original post by Tyrotoxism)
    Sorry; I was referring to America (1% rate) with the liquidity trap comment.
    Or Japan maybe...even though they were able to eke out a small rate cut recently.
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    (Original post by Economist1)
    Or Japan maybe...even though they were able to eke out a small rate cut recently.
    I have a feeling you'll find this interesting:

    http://www.princeton.edu/svensson/papers/Tokyo509.pdf
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    (Original post by Tyrotoxism)
    I have a feeling you'll find this interesting:

    http://www.princeton.edu/svensson/papers/Tokyo509.pdf
    Thanks a lot. The abstract certainly is very interesting.
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    Could someone help me with this question.

    What is meant by "optimal markup on cost"?
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    (Original post by shaunskjw)
    Could someone help me with this question.

    What is meant by "optimal markup on cost"?
    I presume this is the difference between the average cost and average revenue at the quantity where marginal revenue equals marginal cost.
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    I think this is the formula : OMC = - 1/1(1-E) --------Where E = Elasticity of price. Im just not sure how to explain it.
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    Can somebody help me woith this? Im doing demand and output part of my target 2.0 presentation. I struggling a bit how to structure my presenetation, whether to cut interest rate by looking at demand and output?

    In order to show a rapid decrease in Aggregate demand, the consumer spending which takes 65% of the AD is crucial. How can I illustrate that? By using data such as retail sales, saving ratio? How about consumer confidence? and with current economic crisis tightened credit?

    With tighter credit, there is less firms entering the market, will that affected inflation? And how does the depreciation of sterling affected retail sales?

    How can I illsutrate the outlook of fiscal policy? By saying the huge governement deficit is quite unlikely to boost Govnt spending?

    Does import and export a minor factor of aggregate demand?

    Does the housing market illustrate the investment confidence in the economy?

    For outlput, shall I look at CBI survey? Does that included financial output or simply manufacture goods?

    Overall, should interest rate be cut further from 3.0% by looking at the shinking demand and output?

    I know the questions seem doss to you guys, but please help.
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    (Original post by s2000_147)
    Can somebody help me woith this? Im doing demand and output part of my target 2.0 presentation. I struggling a bit how to structure my presenetation, whether to cut interest rate by looking at demand and output?

    In order to show a rapid decrease in Aggregate demand, the consumer spending which takes 65% of the AD is crucial. How can I illustrate that? By using data such as retail sales, saving ratio? How about consumer confidence? and with current economic crisis tightened credit?

    With tighter credit, there is less firms entering the market, will that affected inflation? And how does the depreciation of sterling affected retail sales?

    How can I illsutrate the outlook of fiscal policy? By saying the huge governement deficit is quite unlikely to boost Govnt spending?

    Does import and export a minor factor of aggregate demand?

    Does the housing market illustrate the investment confidence in the economy?

    For outlput, shall I look at CBI survey? Does that included financial output or simply manufacture goods?

    Overall, should interest rate be cut further from 3.0% by looking at the shinking demand and output?

    I know the questions seem doss to you guys, but please help.
    When do you have to make your interest rate decision for? I mean, before or after Christmas?
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    Hi there I'm trying to do a question on leisiure markets, but I can't seem to find any notes on them. Does anybody have any notes for the leisure markets. This is for the OCR exam board by the way.
    Thanks in advance.
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    (Original post by Economist1)
    When do you have to make your interest rate decision for? I mean, before or after Christmas?
    before Xmas
    based on the 3% rate announced last week.
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    (Original post by vinsta)
    Hi there I'm trying to do a question on leisiure markets, but I can't seem to find any notes on them. Does anybody have any notes for the leisure markets. This is for the OCR exam board by the way.
    Thanks in advance.
    I don't know about notes but we used this textbook for the module: http://www.anforme.co.uk/pages/book_labour_3rd_ed.htm

    There's this thread about the exam last year, but I'm not sure how much info there is in it: http://www.thestudentroom.co.uk/showthread.php?t=605854
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    hi i have an essay to hand in on thursday and i am really stuck n this question. plzzz help

    The question is explain, in a perfect market for a good, price alters in response to a shift in consumer demand, assuming everything else affecting price remains unchanged?

    what way would i start and what do i need to include? if anyone could help it would be great thanks
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    (Original post by alex_hk90)
    I don't know about notes but we used this textbook for the module: http://www.anforme.co.uk/pages/book_labour_3rd_ed.htm

    There's this thread about the exam last year, but I'm not sure how much info there is in it: http://www.thestudentroom.co.uk/showthread.php?t=605854
    Cheers Alex.
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    i was would appreciate if some one could answer this question, or tell me what they would include and how they would structure it. many thanks.

    Discuss the extent to which rural-urban migration promotes economic development. (15 marks)
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    Guys,

    Can you answer this question for me or tell me how to structure my answer:

    A peace group has put forward a proposal that the UK should halve its spending on
    defence, including giving up its nuclear capability. Using PPF, evaluate the possible
    implications of this proposal.


    Thanks!
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    hey ya'll ! I came across this website on google when I was trying to do my microeconomics assignment, which is making my brain ache. I hope someone can help me.

    Assume that a firm uses labor and capital in the production of a certain commodity. What is the efficient amount of labor and capital if the marginal product of labor is MPL= 100K-L, the marginal product of capital is MPK= 100L-K, the total amount spent on input is $1000, w=$2 per unit of labor and r = $5 per unit of capital?

    Any help will be greatly appreciated. Thanks once again !
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    (Original post by Charlie_29)
    hey ya'll ! I came across this website on google when I was trying to do my microeconomics assignment, which is making my brain ache. I hope someone can help me.

    Assume that a firm uses labor and capital in the production of a certain commodity. What is the efficient amount of labor and capital if the marginal product of labor is MPL= 100K-L, the marginal product of capital is MPK= 100L-K, the total amount spent on input is $1000, w=$2 per unit of labor and r = $5 per unit of capital?

    Any help will be greatly appreciated. Thanks once again !
    What do K and L represent?
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    capital and labour??
 
 
 
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