Advanced Macroeconomics by Sanjay Rode

By Sanjay Rode

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Above average population income will have a positive average transitory income component Y ti > 0 for this i above average group. Then observed average income will be greater than average permanent income that is − − Y i > Ypi − − − − All income groups will have average permanent consumption given by C pi = K Y pi . But since C ti is not related to either Cpi or Yti, all groups including the above average income group will have a zero average transitory consumption − components, so that C i = C .

4. Standard of deferred payment Money has an important feature that it is a standard of deferred payment. Money can be paid in future. Most of the people buy goods and services and they pay bills in the future period. It is the only method of payment available to money. 4 Demand for money Money is demanded for different transactions. The money demand is a function of prices, interest, and monetary base. But the money demanded for the transaction purposes is interest inelastic. The demand for money approaches are mainly divided into the following two approaches.

Please click the advert Is your recruitment website still missing a piece? Bookboon can optimize your current traffic. By offering our free eBooks in your look and feel, we build a qualitative database of potential candidates. 3 Aggregate supply curve Aggregate supply curve is classified into two types. The Keynesian and Classical aggregate supply curves are based on separate assumptions. The classical supply curve assumes that the supply of the factor of production is fixed in the classical way.

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