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The nation of Upstandia uses kroner for money and its tax code is such that a person making 100,000 kroner per year pays 40,000 per year on income taxes; a person making 200,000 per year pays 70,000 kroner per year and a person making 300,000 kroner per year pays 90,000 kroner per year in income taxes. Upstandias in come system is?
After bad experiences with a flexible exchange rate, the small open economy of Rivendell decides to fix it exchange rate. Suppose the economy of Rivendell has reached the long run equilibrium. Is trade policy more effective under a flexible exchange ..
Elucidate what is the present discounted value of the cost of the car if you use GM's interest-free financing
During the recession of 2007-2009, the U.S. economy was experiencing a decrease in home prices and consumer wealth, a credit crisis in the financial markets, and declining consumer and business confidence. What components of aggregate demand were aff..
Thorpe Mfg., Inc., is currently operating at only 88 percent of fixed asset capacity. Current sales are $320,000. Suppose fixed assets are $250,000 and sales are projected to grow to $357,000. How much (in dollars) in new fixed assets is required to ..
How is an investor's choice of which security to purchase related to his degree of risk aversion?
If you were a manager at PepsiCo, would you try to convince your colleagues that introducing the new soft drink is the most profitable strategy.
According to the Congressional Budget Office estimates, output was 2.9% below potential output in the 4th quarter of 2014. The unemployment rate was 5.7%. What was the implied natural rate of unemployment?
Compute the ”Capitalized Costs” for Alternates “ R” and” S” using the interest rate of 10% and then select the best choice. “ R “ First Cost - $120,000, Annual Operating Cost - $40,000, Salvage Value - $50,000, and Life (years) - 5. “ S “ First Cost ..
Suppose that Jenny is the only consumer in the antique car market. Her willingness to pay for an antique car is $200,000. Based on Jenny's willingness to pay, plot her demand schedule in the graph below using the blue points (circle symbol). Line ..
Why would your company have bid with a zero mark-up on some past tenders? Why didn’t it win all of those contracts?
Illustrate which combination of fiscal policy actions would be most contractionary for an economy experiencing severe demand-pull inflation.
Consider again the case analyzed in class with two sectors exhibiting constant returns to scale technology (sector A is capital intensive and sector T is labor intensive). Suppose there is a neutral technological change in sector T only (no technolog..
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