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Suppose a Caribbean government facing budget deficits asked their economic advisers to solve the following problem: they would like to reassure the credit rating agencies S&P and Moody's that they are serious about proposing a long-run plan that will eventually reduce the budget deficit further, but are also concerned that any contractionary fiscal policy might push the economy into a recession. One adviser suggests that the government pass legislation now that will raise taxes, starting two years from now. Assume throughout this problem that everyone believes that taxes will indeed rise two years from now.
i. Why would the simple Keynesian consumption function predict that this strategy would work?
ii. Many of the government's economists argue that the legislation will affect the economy now even if taxes do not increase for another four years. Explain their reasoning and the theory (or theories) they use.
The governments at certain times have said they are going to cut the federal budget to decrease government spending. What are the two types of government spending categories and what roles do they play.
Intermediate Microeconomics - Budget Constraint: Draw Alan's budget constraint with such promotional campaign.
The council decides to allow a boat to fish in the lake only if its owner buys a fishing licence. To maximize total profit (of citizens and council), how many groschens should the council charge for a licence?
1.nbspnbspproduction possibility frontiers studying or socializing?nbspa. nbspdraw a production possibilities curve for
sometimes market activities production buying and selling have unintended positive or negative effects outside the
News Analysis. Analyze a news from a global newspaper (Financial Times, Newsweek or a similar one), delivering a report that could be useful for your company to take a managerial decision.
suppose that there is a cultural shift in america emphasizing the importance of saving money as opposed to current
assume you are the plant manager for bravo pork rinds which produces pork products in a market that approximates
assume that there is concern that the economy is not recovering from the current recession due to a high unemployment
Two firms are competing in an oligopolistic industry. Firm 1, the larger of the two, is contemplating its capacity strategy, which we can broadly characterize as "aggressive" or "passive." The "aggressive" strategy involves a large increase in cap..
How did the market structure in which the firm competes affect the firm’s decision-making? If the market structure was not a factor, how do you believe it should have been incorporated into the strategic decision-making process?
What phase of the business cycle do you believe Spain was in during 2013? Explain why with reference to theory and represent this phase of the business cycle using an aggregate demand and supply model.
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