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The Bush-Greenspan policy mix
In 2001, the Fed pursued a very expansionary monetary policy. At the same time, President George W. Bush pushed through legislation that lowered income taxes.
a. Illustrate the effect of such a policy mix on output.
b. How does this policy mix differ from the Clinton-Greenspan mix?
c. What happened to output in 2001? How do you reconcile the fact that both fiscal and monetary policies were expansionary with the fact that growth was so low in 2002? (Hint: What else happened?)
Billy Penny is trying to determine how many units of two types of lawn mowers to produce each day. One of these is the Standard model, while the other is the Deluxe model. The profit per unit on the Standard model is $60, while the profit per unit..
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Which of the following statements about poverty rates is not true?
Suppose that a firm faces a demand curve that has a constant elasticity of -2. This demand curve is given by q = 256/P^2. Suppose also that the firm has a marginal cost curve of the form MC = 0.001q. a) Graph these demand and marginal cost curves
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The following calculations help you see how the ratio of debt to GDP changes from one year to the next. Suppose that in a hypothetical country with a currency called the ducat, debt is equal to 140 trillion ducats and GDP is equal to 100 trillion ..
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