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Suppose the economy has no income taxes or imports. How is the size of the expenditure multiplier related to the marginal propensity to consume? What is the multiplier if the MPC equals 0.25? If the MPC equals 0.50? If the MPC equals 0.90?
Does this change in the value of the dollar make imports cheaper or more expensive for Americans? Are American exports cheaper or more expensive for importers of U.S. goods in Japan? Illustrate by showing the price of a U.S. e-reader in Japan, before..
Despite the abundance of oil in United Arab Emirates our economy still remains at low levels, what are the reasons for this trend in the economy be sure to mention some examples in your explanations.
Suppose that the Fed's inflation target is 2%, potential output growth is 3.5%, and velocity is a function of how much the interest rate differs from 5%: %^V= 0.5 X (i-5). Suppose that a model of the economy suggests that the real interest rate is..
What is the government budget balance? Does the government have a budget surplus, budget deficit, or balanced budget?
What are the reasons for the poor economic performance of most countries in sub-Saharan Africa? Is it in the interest of high-income countries to promote the development of poor countries? Why?
The auto of your dreams costs $20,000 today. You have found a way to earn 15% tax free in a savings account. If the cost of your dream car is expected to increase 10% every year, how much must be deposited into the savings account to provide for t..
How does the income approach to measuring GDP differ from the expenditure approach? Explain the meaning of value added and its importance in the income approach. Consider the following data for the selling price at each stage in the production of ..
Suppose the government is concerned that the going wage rate of $6 per hour for low skilled workers is too low.
Assume you do not think that the statement does have any credibility. Illustrate what is the expected impact of the resulting policy on your business.
What is one significant consequence of fractional reserve banking Banks are vulnerable to "panics" or "bank runs." Banks can only lend an amount equal to its deposits. Banks hold a portion of their deposits in gold. Banks can serve the withdrawals..
For the people around here this extra million dollars of government spending means 42 direct jobs and, depending on the employment multiplier you prefer, another 120 or 160 indirect jobs. In the bush. On the booming grounds. In the drugstore." Per..
A producer in a perfectly competitive industry has a cost function described by TC(q)=1000+6q+0.2q^2. If the market price is 40 and it has already committed to paying the fixed cost, what is the maximum profit for the producer?
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