Perfect Competition in the Long Run

In the long run, we assume that all Factors of Production are variable, which means that the entrepreneur can adjust plant size or increase their output to achieve maximum profit. Perfect Competition Long Run equilibrium results in all firms receiving normal profits or zero economic profits. Perfect Competition Long Run Factor Mobility The…
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Objectives of Central Banks

Central banks oversee the banking system in their country. They play an important role in managing a state's currency, money supply, and interest rates. There are five primary objectives of central banks. The Federal Reserve is the central bank of the United States. Objectives of Central Banks 1. Inflation A central bank pursues a low…
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Cost-Push Inflation

A fall or left shift in Aggregate Supply is the cause of Cost-Push Inflation. This shift can occur from an increase in the cost of production or decrease in the volume of production. An increase in the Aggregate Demand curve causes Demand-Pull inflation. An interaction of cost-push inflation and demand-pull inflation results in the Wage Price…
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Demand Side Policies

Demand Side Policies are attempts to increase or decrease aggregate demand to affect output, employment, and inflation. Demand Side Policies can be classified into fiscal policy and monetary policy. In general, demand-side policies aim to change the aggregate demand in the economy. Aggregate Demand is made up of Consumer Spending + Government…
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Introduction to the Bill of Exchange

A bill of exchange is a specialized type of international draft used to expedite foreign money payments in many types of international transactions. In addition, a draft is commonly used in the U.S. while a bill of exchange is primarily used outside the U.S. A negotiable instrument is a signed writing, containing an unconditional promise or…
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