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Suppose that nominal GDP equals $15 trillion, the current budget deficit is $600 billion, and the net public debt/GDP ratio is 80 percent. Given that the government wishes to maintain the net public debt/GDP ratio at 80 percent, explain whether the government needs to decrease its budget deficit, maintain the current budget deficit, or can increase its budget deficit if, over the next year, nominal GDP grows by: (i), 4 percent; (ii), 5 percent; and (iii), 6 percent. If the government either needs to cut its deficit or can increase it, explain by how much in each case
Public health information can be broadcast at a cost of $100. Public health information is a pure public good, in that many people can use the information simultaneously and preventing people from using the information is very difficult. One group of..
Compute the net present value using the numbers provided. Assume that annual cash flows occur at the end of the year.
Each year, public schools are rewarded with bigger budgets for achieving a rating of "excellent” or "recommended” and are punished for rating "needs improvement.” These ratings are based on meeting thresholds on a broad set of measures such as attend..
Justin likes to have chocolate chip cookies and milk for breakfast. When the price of a chocolate chip cookies is $1 and price of a glass of milk is $1, he consumes 10 chocolate chip cookies and 6 glasses of milk each week. hat happens to the MRS at ..
After paying the movie distributors and meeting all other noninterest expenses, the owner expects to net $2 per ticket sold. Construction costs are $1,000,000 per screen. What is marginal benefits and marginal costs.
Illustrate what are consumption also saving in each period, suppose no borrowing constraints. What happens if the consumer faces a borrowing constraint that prevents her from borrowing.
Suppose Sammie Wall currently has a monopoly on widgets. The inverse demand function for the only customer interested in widgets is [P=40-6Q] and the cost to produced widgets can be described by the following cost function: [C=10+2Q^2] . If Sammie de..
Johnny Rotten consumes two commodities, namely garbage and vinyl records. He keeps the garbage in the backyard where it is eaten by goats and vermin. The reason he accepts the garbage is that people pay him $2 per sack for taking it. Write down an eq..
For the production of the type Q = 2K + L with wage rate w = $1 and price of capital (rental rate) v = 1, the expansion path is K axis. Do you agree? If any firm experiences increasing returns to scale in a perfectly competitive industry then the ind..
Explain two examples of a public and private goods that you have consumed? Why do you think the government has to supply public goods?
If the mortgage interest rate is 7 percent, approximately how much are home owners paying in annual mortgage interest? b. If the interest rate drops to 6 percent, by how much will annual percentage decline?
How do prices, output, and profits differ between monopolies and monopolistically competitive firms.
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