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An economy is operating with output $400 billion below its natural level, and fiscal policymakers want to close this recessionary gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. The marginal propensity to consume is 4/5, and the price level is completely fixed in the short run. In what direction and by how much would government spending need to change to close the recessionary gap? Explain your thinking.
A common news story in any jurisdiction with single payer health care systems - for example, in Canada their socialized system does not allow private health care alternatives - is the battle that pits the government health system's refusal to pay for..
Individuals A and B are the only consumers of good X. Individual A demand for good X is given by: Q = 4 – P and individual B demand for good X is given by: Q = 8 – 2P. The supply for good X is given by MC = 3. Assume good X is a (pure) public good. G..
Discuss whether there should be a different standard of behavior in the workplace compared to personal relationships. Analyze and evaluate the various issues presented while arguing and debating the connections between business, law, politics, and et..
At the profit maximizing level of output for a monopolist:
In 2011, the government of Greece ran into severe financial difficulties. For years, the Greek government had spent much more than it had received in tax revenue, financing the substantial budget deficits by borrowing.
Assume that the government increases its spending by $100 million to stimulate demand. In the long run, the effect of this spending is to
Suppose the amount of exports of textile machinery from Italy to the rest of the world equals 60 billion tons. The amount of imports of textile machinery into Italy from the rest of the world is 40 billion tons. Therefore, the intra industry trade sh..
Based on the current events in our economy, please keep this in mind. When interest rates are held more or less at a constant rate and price risk remains stable, financial leverage does not greatly impact changes is stock return at the market level. ..
If the marginal benifit curve to carbon emission reductions is relatively flat (relative to the cost curve), explain why a tax might be preferable to a cap-and-trade system
Write the print f C Code which will display the output with three spaces preceding it. Illustrate what is the marginal cost of the last bucking bronco produced.
Assume that in short-run equilibrium, a particular monopolistically competitive firm charges $10 for each unit of its output and sells 48 units of output per day. The average total cost (ATC) for those 48 units is $4. What will be its economic profit..
What are the main factors that determine exchange rates? Why are exchange rates so volatile?
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