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During the recent recession, when countries around the world suffered high unemployment rates and the governments were experiencing huge budget deficits, economists debated whether to raise or cut taxes or to raise or cut government spending. Many argued that the governments could raise taxes on certain income groups and, at the same time, increase spending to give a boost to the economya) Let us consider a hypothetical example to examine the merit of this argument. Assume that an economy was in liquidity trap and its initial GDP was 10,000 billion dollars and the marginal propensity to save was 10%. Assume away the foreign trade sector. How much would be the change in income (GDP) if the government increased both spending and taxes by 20 billion dollars?b) Do you expect the same result to hold in the standard model where the IS curve and the LM curve are of normal shapes?
If the rate of return earned on reinvested funds is 15 percent also the industry reinvests 40 percent of earnings in the firm, what must be the discount rate.
The inverse market demand in a homogeneous-product Cournot duopoly is p=200-3(Q1+Q2) and costs are C1(Q1)=26Q1 and C2(Q2)=32Q2. Determine th reaction function for each firm. FIrm 1 Q1=, Firm2 Q2= Calculate each firm's equailibrium output.
Determine the quantity demanded, the quantity supplied, and the magnitude of the surplus if a price floor of $50 is imposed in this market.Determine the quantity demanded, the quantity supplied, and the magnitude of the shortage if a price ceiling..
Illustrate what were some of the major contributing factors and how did they combine to cause the recession. How were you affected by it.
Compute the cross price elasticity with respect to chicken price, the advertising elasticity and the income elasticity using the information listed
What do you think it should have been a good idea for these airlines to cut their frequent-flyer programs in order to earn higher profits.
Compute the price elasticity of demand.
Compare the automotive manufacturing industry today to the automotive manufacturing industry of the 1950's. Applying the economics of price and output, what is the difference between the industry of today and that of the 1950's.
Dairy farm Industry a small producer of milk and cheese, has estimated the quantities of milk.
Elucidate how these economic concepts can be used to address the firm's problems and opportunities.
The socio-economic shortcomings that China experienced
The data are available for output (Q) and Long Run Total Cost (LTC) for a firm. Using appropriate calculations determine the range of outputs over which the firm's technology exhibits Increasing, Decreasing or Constant Returns to Scale.
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