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ASSUMPTION: An initial condition or statement that sets the stage for an analysis by abstracting from the real world. Assumptions are important to economic theories and economic analysis. Some assumptions are used to simplify a complex analysis into more easily manageable parts. These establish idealistic benchmarks that can be used to evaluate real world conditions. Other assumptions are used as control conditions that are subsequently changed to evaluate the effect of the change. The use of ceteris paribus assumptions in comparative statics analysis is an excellent example.
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Lesson 5: Market Demand | Unit 4: Determinants
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Page: 16 of 20
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The five determinants that cause the demand curve to shift are:- Income: Income affects the ability of buyers to buy. It can affect a good in two ways-normal or inferior.
- Preferences: Preferences, our likes and dislikes, affect the willingness of buyers to buy.
- Prices of other goods: Other goods can be either substitutes or complements to the good we're analyzing.
- Expectations: Buyers' current demand depends on expectations of future prices.
- Number of buyers: More buyers, more demand. Fewer buyers, less demand.
These categories include all factors other than price that affect demand.
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REPURCHASE AGREEMENTS Short-term loans in which borrower sell assets to lenders with the agreement to purchase the assets at a later time a higher price. The assets most commonly sold are short-term U.S. Treasury securities and the higher price includes an interest payment on the loan. Repurchase agreements, also termed repos, are commonly used by the borrowers (that is, the sellers) to acquire short-term liquidity without foregoing the longer term investment returns from the assets. Repurchase agreements, along with other institutional investment near monies, are added to M2 to derive M3.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius wanting to buy either a video camera with stop action features or one of those memory foam pillows. Be on the lookout for the happiest person in the room.
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Rosemary, long associated with remembrance, was worn as wreaths by students in ancient Greece during exams.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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IBS
International Bank for Settlements
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