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According to the IS-LM model, what happens to the interest rate, income, consumption, and investment under the following circumstances? Support your answer with suitable diagrams.
a) The Central Bank increases the money supply.
b) The government increases government purchases.
c) The government increases taxes.
d) The government increases government purchases and taxes by equal amounts.
Using IS-LM analysis show graphically and explain how a liquidity trap affects the Fed’s ability to use conventional monetary policy to affect short-run interest rates and output.
Assume that demand for good X is a function of its price (PX), the price of good Y (PY), and Income (M) as follows: QX = {(M + PY)/(2PX)} - 1 Given the following values for these variables: PX = 2; PY = 5; M = 51 (a) Calculate the (own) price elastic..
Snip and Chip Inc. sells silk upholstery curtains for $150 each. The project's budgeted unit sales for four months during the current year
Suppose a monopolistic competitor and long-run equilibrium has a constant marginal cost of six dollars and faces the demand curve given in the following table: What output will the firm choose? What will the monopolistic competitor's average fixed co..
Suppose an industry is composed of six firms. Four firms have sales of $100,000 each, and two firms have sales of $50,000 each. Explain how concentration ratios are calculated. Determine the concentration ratios in the market. Explain how the Herfind..
Joint output of individuals or nations will be maximized when goods are exchanged between parties in accordance with the law of "comparative advantage". An increase in consumer income will affect the supply of any given product. The production possib..
If collusion is not allowed, what kind of market arrangement do you think is likely to result from competitive interactions among these four firms?
What do temporary changes in the tax code do for incentives? Does this encourage long term planning? Should the government encourage long term planning? Should the Government use tax policy to change behavior?
Elucidate what impact will this change have on the price level, output, and employment in the short run in the United States.
Suppose there are two goods being produced in the economy: robots and wheat. Robots are a capital intensive good and wheat is a labor intensive good. Supposethat there are two countries: France and Brazil. France is capital abundant andBrazil is labo..
What type of demand and supply would a hope diamond have .What impact will price have of the supply and demand curve? Be able to draw the graph that illustrates your answers
Have you thought about starting your own business? What opportunities seem attractive? What type of financial resources and personal skills would you need to launch a new business? How would you obtain these financial skills and personal resources?
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