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Write a two-page essay on the role of automatic stabilizers. In your essay include comments on the following points:
a. What are automatic fiscal stabilizers? How do these stabilizers stabilize real GDP in the face of AD and AS shocks?
b. What is the role of the simple multiplier [ 1/{1 – MPC(1 – t) – m}] in stabilization of the swings in real GDP?
c. How the slope of the AD curve affects the stability of real GDP in the presence of AS shocks?
d. How the automatic stabilizers depend on the sizes of MPC, t, and m.
Suppose the Canadian economy, on a fixed exchange rate, has a real growth rate of 2% and is in equilibrium with an inflation rate of 10% and a risk premium of 1%. Suppose changes in the U.S. cause its real rate of interest to increase from 3% to 4% a..
Explain why the general level of incomes is high in the united states also other industrially advanced.
In a short-run production process, the marginal cost is rising and the averger variable cost is falling as output is increased. thus
Considering each of the factors that impacted women at this time, was this a beneficial period for women's rights? Your answer should include some reference to reform, the Market Revolution (industrial technologies), and expansion.
Which of the following might explain why the government would create a price ceiling for a certain good?
A firm has $5 million in sales, a Lerner Index of 0.75, and a marginal cost of $45, and competes against 3,000 other firms in the relevant market. What price does this firm charge its customers? By what factor does this firm mark up its price over ma..
Wilpen plans to charge a wholesale price of $1.65 per can. As the average value of tennis racket is $110, and average household income of consumer is $24,600.
After September 11, 2001, there was much talk that the United States was going to go into a depression. There was, in fact, a downturn in the economy that was considered by many to be a recession. A depression did not occur. Why is another depression..
Assume two firms, A and B, serve a market with demand D(p) = 100 minus (p). Also assume that (i) firms compete for market share (quantity competition) and (ii) firm A has cost function cA(Q) = 2Q and firm B has cost function cB(Q) = Q. Describe this ..
Suppose that the government increases taxes by $150 billion. Suppose that the MPC is .80 and that there is no crowding out effect. Which is the effect of this change in Yd, in C and aggregate demand?
Estimated regression equation for which quantifies the demand for Widget
Given our still currently high unemployment rate (by historical standards) and low inflation rate, argue "for or against" a Supply-Side policy focus versus a Demand-Side policy emphasis.
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