Question
Let's say that G(y) = Ay and that y(G) = By with A = 100 and B = 1. What would be the level of
Let's say that G(y) = Ay and that y(G) = By with A = 100 and B = 1. What would be the level of income in this country?
G(y): quality of government as function of income
y(G): amount of income based on the quality of government
Now, say that the institutions view holds and that institutions improve. Specifically, the relevant constant grows (A or B) grows by 10%. What is the new value of y?
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Financial Management Core Concepts
Authors: Raymond M Brooks
2nd edition
132671034, 978-0132671033
