Increase government expenditure

Assignment Help Business Economics
Reference no: EM13743990

Suppose the Council of Economic Advisors (CEA) hired you as an Economist (Economic consultant). The head of the council tells that she believes the current unemployment rate of 9% is too high. They would like to increase real aggregate output (RGDP). She wants to know what policy to pursue to increase RGDP by $2 trillion ($2,000 billion). The best estimate she gave you is the value of MPC = 0.8. Which of the following policies should you recommend and why? You need to show your work of estimations and explain in words.

a. Increase government expenditure (G) by $400 billion

Reference no: EM13743990

Operates as a price-discriminating monopolist

Cinemax is the only movie theater in Dannyburg. As such, it operates as a price-discriminating monopolist. Two types of customers view movies there: adults (A) and high school

Using the economics of the firm-multi-billionaire who claims

Republican presidential candidate Donald Trump is a multi-billionaire who claims that, if elected, he would run the country like a business firm. Using the economics of the fi

What is the best way to measure firm performance

One of the reasons economists and managers want to understand a company’s economic profit is to determine the market value of a company. Understanding a company’s value is imp

Health insurance is offered at a community rated premium

Describe the problem of “adverse selection” when health insurance is offered at a community rated premium? Define the term “community rated premium” as well. Is it possible to

Subsequent declaration of war in wake of assassination

Why did German leaders support Austria-Hungary's ultimatum to Serbia and its subsequent declaration of war in the wake of the assassination of Archduke Francis Ferdinand in Ju

Significance of adaptive and rational expectation hypothesis

What is the theoretical significance of the Adaptive and Rational expectation hypothesis? Explain with the help of the Phillips Curve, the effectiveness of policy actions when

Local public health agencies balance the cost of serving

How must federal, state, and local public health agencies balance the cost of serving the people with the cost of ensuring there are appropriate and effective emergency prepar

Monopolistically competitive firm

You are the manager of a monopolistically competitive firm. The present inverse demand curve you face is P = 100 – 4Q (MR = 100 – 8R). Your cost function is C(Q) = 50 + 8.5Q2


Write a Review

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd