Homework answers / question archive / 1) A) Classical theory believes that government should not intervene and should set the market free so that they could regulate themselves alone

1) A) Classical theory believes that government should not intervene and should set the market free so that they could regulate themselves alone

Economics

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1) A) Classical theory believes that government should not intervene

and should set the market free so that they could regulate themselves alone. Everyone has the right to pursue their own interest whether it is based on services or demands.
B) Classical theory believes more about the inflation and little less about the unemployment. They believe that inflation has a greater threat for long term growth of economy.
C) Classical theory focuses more on long term problems because it believes that short term problem could be solved even by themselves.

2) Identify key assumption underlying Keynesian and Classical approaches

to macroeconomic analysis. In your answer identify how Keynesian and Classical economists differ regarding understanding about the business cycle and how the economy should best be managed?

3) Consider a closed economy with real GDP in the long run

of $400, consumption expenditures of $250, government purchases of $75, and net tax revenue of $20. What is the level of national saving?

4) Assess TWO peculiar characteristics of labour markets in the Caribbean. 

5) Piense en que usted va a tomar un crédito por $5.000.000, por el cual,

le cobran de forma anticipada 100.000, que se corresponden al interés del primer mes. Así las cosas, usted recibe en préstamo tan solo $4.900.000. ¿Cuál es la tasa de interés E.A. que le cobra la entidad en esta operación financiera?
Seleccione una:
a. 26,82% E.A.
b. 27,43% E.A.
c. 25% E.A.
d. 24% E.A.

6) Analyse purchase with your high( car) and low involvement (bread or

milk) purchase which you ever made. Compare this with the "Simplified Model of consumer Decision Making".