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The relationship between income, savings, and consumption is directly related to the price level in the economy. Your research has shown that for every additional dollar of disposable income, consumers currently spend $0.75 and save the rest. Assuming an increase in investment of $1 billion dollars,
• What is the Marginal Propensity to Consume?
• What is the spending multiplier?
• What will the effect on the Gross Domestic Product?
• Assuming the price level stays the same, what will be the effect of the new investment on the aggregate demand curve?
Suppose that in a week the price of Greek yogurt increases from $1.25/lb to $1.75/lb. At the same time, the quantity of Greek yogurt supplied increases from 100,00 lbs to 150,000 lbs. What is the price of elasticity of supply for Greek yogurt?
Comment on the following statement: “If John McCain had won the 2008 election everything would have been different.” What would have been different? Would that be a good or bad thing? Would anything be the same? What if Mitt Romney had won the 2012 e..
Why does the loss in economic surplus directly experienced by the participants in the marketplace for s good
The market demand functions for corn is Qd = 15 – 2P, and the supply function of corn is Qs = 5P – 2.5. Suppose the government gives corn farmers a $0.70 subsidy per bushel of corn. What will be the effects on aggregate surplus, consumer surplus, and..
Looking at all commercial banks in the United States, _______ is the largest category of liabilities.
explain a diagram for an industry in a developing country where infant industry protection might be a good idea. What are arguments for and against governments in developing countries giving infant industry protection to new industries.
Describe the social and economic repercussion of the following inventions: the typewriter, the jet airplane, television, penicillin. Which do you think is greater in each case - the social or the economic impact?
You have selected a small coffee shop in your area. Develop a strategy for expanding this business in a regional market. Why do you believe the business could succeed in this new geographic market? What are the benefits of expanding into this geograp..
You see an advertisement for a book which claims to show how you can make $1,000,000 in investment profits in a year, with no initial investment required and no risk of any loss. The book costs $500. Would you buy it? Why or why not?
In the country of Republic of Texas indirect taxes are $4,664, corporate income taxes are $9,824, transfer payments from the government to households are $9,403, personal income taxes are $5,723, the interest paid on the debt of the government is $9,..
France exports about 18 percent of its GDP, neighbouring Belgium exports 46 percent. What areas of economic policy are likely to be affected by such variations in exports?
Question 1 Why would perfectly competitive industries advertise even though individual firms do not? Question 2 We could state correctly that the minimum characteristic necessary to distinguish among pricemaking firms is:
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