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a) Suppose that there is an exogenous unexpected decline in consumption spending by households. Use the IS-LM, AD-AS model to derive the short-run and long-run effects on i, P, and Y. [assume that there is no change in either monetary or fiscal policy and that the economy moves immediately to the new intersection of the IS & LM curves.]
b) Indicate the full multiplier effect of this decline in consumption on your graph. What is the implicit assumption that underlies the expenditure multiplier? Explain why the decrease in Y in the short run is less than the full multiplier effect. What is the value of the expenditure multiplier in the long run? What component of aggregate demand rises to offset the decline in C (in the long run), and what makes this happen?
write down ten results from the polls that indicate something interesting about the relative strength of the parties. Write a letter to a presidential candidate explaining what you would recommend based on this data.
Assume the subsequent data describe o/p in two different yrs. Compute nominal GDP in every yr.
Ethical relativism is best described as what type of a theory?
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What is the value of the economic's MPC. Data applies to an economy with only two sectors-households and firms no government or export.
Suppose we refused to sell goods to any country that reduced or halted its exports to us. Who would benefit and who would lose from such retaliation. What could you suggest alternative ways to ensure import supplies.
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Many police officer positions being advertised today require the applicant to have a college degree even though the tasks of a police officer rarely call upon college course material. From an economics perspective, why don't police departments increa..
Use the AD/AS model to explain and show the current economic situation. Then suggest a fiscal approach to solve the current economic situation without adding any more debt. The current MPC = .80.
Anation's consumption function (expressed in millions of inflation- adjusted dollars)is: C=200+.80*DI. what is value of autonomous saving.
Identify three roles for money: money is a unit of account, a store of value also acts as a medium of exchange.
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