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Autonomous consumption = 660
Marginal propensity to consume = 0.8
Autonomous taxation = 200
Income tax rate = 0.2
Planned investment = 500
Government spending = 500
Autonomous net exports = 300
NX = 0.04
Do you think this particular budget cutting policy helpful to curb the growing budget deficit.
Electric cars: Now consider the invention of cheap electric vehicles. Explain how you imagine the invention of cheap electric cars would affect the demand for gasoline? Why? Which determinant of demand or supply would be affected?
If the price elasticity of demand is -0.6 and the income elasticity is +0.25, then what is the effect of a simultaneous 10% increase in price and a 20% increase in income on total health expenditures (again just the direction, do not need to calculat..
Tim is offered two gambles. With gamble A, he either gains $2 or loses $1 with a 50 percent probability. With gamble B, he either gains $3 or loses $2 with a 50 percent probability. Tim prefers gamble B to gamble A. What can we conclude?
Dyna Rubber Inc. manufactures a high performance tire called the Sport 70. Fixed development costs for the current year are $600,000 per year. Marginal costs for manufacturing and distribution are $63 per tire. Calculate the output, price total reven..
In March 2008, the Fed helped prevent the bankruptcy of Bear Sterns. However, in September 2008, the Fed and the Treasury let Lehman Brothers go bankrupt. What accounts for the different decisions?
Suppose that, initially, the Michigan economy is in equilibrium with no unemployment. The supply of workers is ES = -1,000,000 + 200w, and the demand for workers is ED = 16,500,000 – 300w, where w = annual wages, and E = number of employed workers.
Converse the latest equilibrium price also quantity to result from these changes.
If the supply of a product increases, then
Explain how a large increase in the income level in U.K., along with no growth in the U.S. in come level lwill effect U.K. demand for U.S. goods and the value of british pounds. ?
Assume that a bone makes 30 annual payments of $1000 starting one year from today. If the discount rate is 3.5% per annum what is the current price of the bond?
If two (or more) countries are shown to have the same (total) quantity of emissions, does this mean that they are equally close to the efficient level of emissions for each one?
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