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With reference to the simple closed economy income-expenditure model,suppose the aggregate consumption function is C = 100 +0.8(Y – T); taxes areT = 10 + 0.25Y; investment, I, is 300 and government expenditures, G, are 200.
(a) Calculate equilibrium income, consumption and the government budgetsurplus.
(b) Calculate the level of income that equates taxes to governmentexpenditures.
(c) Calculate the government expenditure multiplier.
Elulcidate briefly the fundamental determinants of economic growth and development.
Explain why may a government solution to a marketplace failure worsen the market failure.
Increase the level of the activity if its marginal benefit exceeds its marginal cost, but reduce the level if the marginal cost exceeds the marginal benefit. Why is the level where marginal benefit equals marginal cost considered maximum satisfact..
The Heckscher-Ohlin model assumes that tastes are the same in Home and Foreign. Suppose now that tastes are different in Home and Foreign.
Compute the PV of Mr. Deco's payment using the equivalent real cash flow and real discount rate.
The price mechanism would be least important under which kind of economic system? a) capitalism b) socialism c) communism d) fascism
Compute the elasticities of demand for and supply of broccoli at the market equilibrium, and interpret the meaning of these numbers.
The setup activity price driver rate, using the best cost driver for this situation.
What type of market structure is OPEC? What are some important issues that OPEC must confront in their efforts to control the price of oil?
Consider the following production function: Y = AK^aL^(1-a), where Y is units of output, K is units of capital, and L is units of labor. Both A and are constant parameters characterizing the production technology.
In 2005 the US was close to full employment, but many observers and economists were worried about its trade deficit, which was over $700 billion per year. Suppose macroeconomic policymakers wanted to maintain the level of real GDP
Prediction of changes in the business environment affecting strategic planning. Elucidate the relationship among strategic planning and organizational design.
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