The slope of an isoquant is the marginal rate of technical substitution, the rate at which one input can substitute for another keeping output constant.
Explanation:
Network effects (or network externalities) exist when the utility a user derives from a platform increases with the number of other users on the same side or the opposite side of the market.
Explanation:
The Solow residual is the part of output growth that remains after accounting for the contributions of capital and labour inputs; it is commonly interpreted as a measure of total factor productivity growth.
Which of the following is a characteristic of the 'Global Financial Cycle' hypothesis?
A.Co-movements in capital flows, asset prices and credit growth across countries are driven in large part by global factors, especially US monetary policy
B.National financial conditions are completely independent of global factors
C.Capital flows are always driven by local pull factors
Explanation:
The global-financial-cycle hypothesis emphasises that fluctuations in global risk appetite, often linked to US monetary policy and the strength of the dollar, generate correlated movements in capital flows, credit and asset prices across many countries.
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