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Q1. If consumption increases by $12 billion when real disposable income increases by $15 billion, what is the value of the MPC? What is the relationship between the MPC and the MPS? If the MPC increases, what must happen to the MPS? How is the MPC related to the consumption function? How is the MPS related to the saving function?
Q2. How do changes in disposable income affect government purchases and the government purchase function? How do changes in net taxes affect the consumption function?
The vertical long run AS curve compatible with classical economics implies that AD only determines the price level
Explain what occurs when a new technology makes another one obsolete in terms of economic profit?
Research where you would find the U.S. international trade policies and their history as they apply to various industries.
Why do proponents of active policy recommend government intervention to close an expansionary gap. Some economists argue that only unanticipated increases in the money.
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Each firm can monitor the other's price very closely and can respond instantly
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The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled
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Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.
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