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For simplicity, let's assume that every household has a marginal propensity to consume (MPC) of 0.75. If the government implements a fiscal policy involving its purchases of goods and services, by how much should government purchases (G) change to increase the GDP by $4trillion?
Individuals without health insurance impose substantial negative externalities on those who do. In a paragraph, list some of these externalities and briefly describe their signficance.
Use a diagram to show the effects of weak exports and investment on actual versus potential GDP in the Canadian macroeconomy and how might the announced trade deal with the European union provide a source of optimism?
Explain why hyperinflation has such a devastating impact n economies. Explain what it takes to stop hyperinflation Describe the three types of unemployment. What types of government programs would be most effective in combating each type of unempl..
What are the marginal costs and benefits of pursuing additional education and inherent risks associated with this decision?
What is rent seeking How much, potentially, might this monopolist spend on rent seeking activities Assume that they will earn the same profit you calculated in part c forever, and that the interest rate is 5%.
Since demand elasticity is greater than 1 (absolute value) revenues will be increased, and since price is above marginal costs profits will increase.
Calculate the magnitude of the consumer surplus and producer surplus in the pre-tax equilibrium and calculate the tax revenue in the post-tax equilibrium
Every summer, tickets are sold for a high demand event, tickets are distributed on a first-come-first-served basis at 1pm on the day of the show, but people begin lining up before dawn. Most of the people in the lines appear to be students.
It has now become common for firms situating assembly plants to make states compete for their industry; states and local governments often race to offer most generous tax profits.
If neither company discounts its current prices, each company will end up with $400K in revenues for the month. If Company A discounts its prices and Company B does not, Company A will end up with $650K of revenues for the month.
What would be the long run price and quantity for this firm in a competitive market and in the long run how many firms are in the industry?
suppose that Abel builds a factory next to Baker´s farm, and air pollution from the factory harms Baker´s crops. Is Baker´s property right to the land being violated Is an externality present What if the pollution invades Baker´s home and harms he..
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