ISI 2017 key

[RZeta7]

This should help

[Akshay Pamnani]

Yeah so basically a decrease in interest rate increases investments I,which would mean an increase in savings also
As
Savings = Investments + Deficit+ NX

So for savings to increase ,interest rate will have to decrease,makes sense now.

[MAC]

No. Here savings are assumed to be constant. Investment depend on saving, not the other way round.

Also, I do not think congested street will not be public good. It is rivalrous at the moment, (like most public goods are), but after say 15min the street will clear out and other vehicles can occupy the same space occupied by others without even paying any extra charges!4

So congested street should be a public good, while cable is not.

[Halflife]

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[ColtraneBlues]

I actually wish that you were correct there, because I too answered that in the exam.
But we're both wrong.

A public good is both non-excludable and non-rivalrous. If a rivalrous good is non-excludable, its a common pool resource.

In fact, upon googling this question, I kept finding the statement "A city street is a common resource when congested and a public good when not congested".

[Halflife]

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[ColtraneBlues]

You can't conclude from this graph that Savings will increase when interest rates fall (there are other macroeconomic models and studies that make that claim, but I highly doubt ISI would expect us to know those).
Savings is exogenous in this graph. All a fall in interest rate will do- post the equilibrium level- is create surplus demand for loanable funds.

Using the national income identity would overly simplify the matter- it won't be able to capture the net effect of fiscal and monetary expansion that the IS-LM model does.
Essentially, savings depend inversely on the Marginal Propensity to Consume- or directly on the marginal propensity to save. When interest rates rise, people want to consume less and save more- and this is exactly how the IS-LM model describes the money market (the LM side of the model) to work.

[MAC]

@halflife: at least they got 2 editions out of you! I never got released. Stuck in the beta version as suggested by my ISI paper. Expecting around 100 in maths, but only around 55-60 in economics. So totally screwed!

[Halflife]

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[Halflife]

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[Halflife]

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[Halflife]

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[Econ17]

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[Asd1995]

Checking in after 3 days and halflife is still in full throttle :p

When are the results expected?

[Halflife]

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[Halflife]

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[Halflife]

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[MAC]

That is because even I would not rely on my explanations of PEB. Nevertheless,
in PEB

22. Returns to scale is defined in the same way irrespective of whether production function is homogeneous or not. Only thing is it becomes a bit difficult to judge when the function is not homogeneous. So answer is still C.

25. Firm A cannot operate in perfectly competitive market as it has a constant marginal cost. So if price rises, for any reason, it will be shut out off the market.

[Halflife]

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[RichaS]

22. (tL+10)^0.5*(tK)^0.5 < (tL+t10)^0.5*(tK)^0.5

I thought i'll take a break for a few days but you guys are scaring me!