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Why, in a model with no production but two periods does an increase in current taxes (without a concurrent change in government spending) not affect consumption? Explain graphically how such a change effects savings. Suppose that the model also included foreign lenders who were willing to supply consumers with consumption today in return for consumption tomorrow at the initial equilibrium interest rate. How would the results of the model change? Suppose that government spending increased in this last version of the model and the gross interest rate is given by the product of a discount factor and the MRS between consumption today and consumption tomorrow. How would the model likely change in terms of consumption and interest rates? [Thought Question]: Suppose there was production today, but not tomorrow, what would likely happen to output today?
Regional trading blocs, such as the EU and NAFTA, are growing in importance. What are the implications of these trading blocs for international business? Are they helpful or harmful? How may they affect a firm's investment decisions?
On the three issues that economics suggests are worth discussing or consideration when seeking an efficient allocation. Discuss these against the backdrop of the ensuing principles or themes that emanate from them as well as how these relate to the s..
Under which of the following circumstances is the principal-agent problem likely to be most serious. The government agency that controls the development and availability of new medical discoveries, including pharmaceutical drugs is
Now consider the following information for the U.S.: During 2014, consumption expenditures increased by $20.5 billion, gross private domestic investment declined by $8.8 billion, and government expenditures increased by $14.4 billion. In addition, th..
The interdependence of profits in oligopoly markets is caused by. In sequential decision making situations, which if any of the following statements is NOT true about using the roll-back method to solve a strategic decision problem?
State the heckschel-ohline theorem. According to the theorem, predict which country will export cheese? Which will export wine? State other assumptions necessary to draw a conclusion here.
What approach has become an effective means of achieving environmental goals at the least cost to society?
In the long run, economies are expected to move toward equilibrium at the full- employment level of production. Governments, particularly in democratic countries with frequent elections, often try to use economic policy in the shortrun to improve the..
Given that labor is a resource that needs to be used efficiently, what responsibility do you feel the government has in decreasing unemployment? Does the negative relationship between inflation and unemployment have any impact on your decision?
Illustrate would be the effect on D' of decreasing the variable cost per unit by 25% if the fixed costs thereby increased by 10%.
How would your answer to Part A change if economic growth is average and Petal Providers' net profit margin is 7 percent?
This will provide insight into the idea of the optimal number of workers and the value of the marginal product of labor. If wages in the restaurant is $9.00 per hour and the price of a Hamburger is $4.00 and the production function for the workers is..
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