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However this could be affected by the economies supply of resources. The initial increase in demand for capital goods could be greater than the supply, causing officials to decide whether or not to produce more capital goods and reduce the consumer goods or remain the same as did before the increase in demand. Hayek argued that an increase in production for capital goods and a decrease production of consumer goods would cause the proportion of capital to consumer goods to increase.
If you were to keep aggregate supply fixed, it would cause the consumers income to be fixed. This would result in not a drop in demand for consumer goods but a decrease in supply for consumer goods...
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Common topics in this essay:
- Capital Market
- ANALYSIS ON CAPITAL STRUCTURE, DIVIDEND POLICY & WORKING CAPITAL REQUIREMENTS OF
- CAPITAL MARKET ANALYSIS: A DICUSSION ON EFFICIENT MARKET HYPOTHESIS
- CRITICAL ANALYSIS OF BURR AND GIRARDI’S INTELLECTUAL CAPITAL MODEL
- Capital Asset Pricing Model (CAPM)vs.Arbitrage Pricing Theory (APT).
- Capital Asset Pricing Model
- capital control
- Making Capital Budgeting and Capital Structure Decisions
- Migros Corporate Governance Analysis According To Capital Market Board
- Paid In Capital Vs. Earned Capital
- The impact of capital structure on a company’s cost of capital
- Capital Assets Pricing Model
- Capital in the Market and Economy
- hayeks model
- The Impact of Capital Market on Industrial Development
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