Re: DSE 2012

Posted by L14 on Mar 20, 2014; 9:40pm
URL: http://discussion-forum.276.s1.nabble.com/DSE-2012-tp7585294p7585331.html

Hi Sonia, I don't know how to solve 57, but may I ask here about 58,59,60 too.
58: how is the answer positively sloped? if M-L condition is satisfied, NX dec as ε inc => Y dec as ε inc.
 shouldn't the ans be (b)

59: I'm not getting this too
r=r* + (εe - ε)/ε
as r is inversely related to ε, as ε increases, I increases( so Y increases) but NX dec(so Y dec). how is it negatively sloped irrespective of M-L condition. If M-L fails, I increases irrespective of it => Y increases

60: I get the same answer. But please correct if my reasoning is right. As G inc, r inc , so ε dec(as ε and r are inversely related). Similarly M inc, r dec, ε inc.