Changes in the macroeconomy

Assignment Help Microeconomics
Reference no: EM13679911

Consider the following changes in the macroeconomy. Show how to think about them using the IS curve, and explain how and why GDP is affected in the short run. Use both equations and graphs to answer this question.

a. The government offers a temporary investment tax credit: for each dollar of investment that firms undertake, they receive a credit that reduces the taxes they pay on corporate income.
b. Improvements in information technology increase productivity and therefore increase the marginal product of capital.
c. A housing bubble bursts, so that housing prices fall by 20% and new home sales drop sharply.

Reference no: EM13679911

Questions Cloud

The price of bonds and the relevant interest rate : Inverse relationship between the price of bonds and the relevant interest rate.
Find the rate at which ball would radiate energy into space : Imagine suddenly transporting a room-temperature 12 lb bowling ball into space. Find the rate at which the ball would radiate energy into space
How inflation has affected your buying power : How inflation has affected your buying power.
Find how many watts of heat conduction will flow : A window in an old home is being boarded up. The opening is 36 in. wide by 72 in. tall. Find how many Watts of heat conduction will flow through this material
Changes in the macroeconomy : Changes in the macroeconomy
Evaluate the amplitude of the block motion : The acceleration of a block attached to a spring is given by a= -(0.312m/s2)cos([2.48rad/s]t). Evaluate the amplitude of the block motion
Evaluate what the final temperature of the water : You have two cups, one with m1 = 0.92 kilogram of water at t1 = 29.76oC and the other with m2 = 2.88 kilogram at t2 = 45.6oC. Evaluate the final temperature of the water
Write a paper addressing the concept of price equilibrium : Write a paper addressing the concept of price equilibrium
Evaluate what is the maximum current : A 4700 μF capacitor is charged to a 9 Volt battery and then connected across a 1.50 H inductor. Evaluate what is the maximum current

Reviews

Write a Review

Microeconomics Questions & Answers

  Apply economic concepts to real world applications

Relates to content and skills covered in Week 7 of the Weekly Study Program, Chapter 32 of Ganset al. (2012). Refer here to the comments given for Week 7 for assistance in answering this question.

  What criterion could you use to determine whether a small

What explains that marginal cost increases as production of a product increases? inreasing cost law decreasing average cost property diminishing marginal product property law of increasing marginals thats just a sample this is not the test jeeff

  Recognize key stakeholders of the project explain how they

as you brainstorm the project you begin to think about selecting the members of your team and the expertise that will

  Find the exact the area of the welfare loss of the monopoly

No one will buy the good if the price is above $80 and no one will sell the good if the price is below $20. The equilibrium price and quantity if this market is perfectly competitive would be $40 at a quantity of 20.

  Find cross-price elasticity of breakfast cereal and milk

if the price of breakfast cereal falls from 6 to 3 and this leads to an increase in demand for milk from 30 to 40

  Show what happens to the individual demand curve for qy if

Show what happens to the individual demand curve for QY if income increases to 150. (As before, you are only required to calculation the quantity demand for the prices 2, 4, 5, and 10. You can then impute a reasonable approximation of the rest of the..

  Building upon the annotated bibliography and literature

building upon the annotated bibliography and literature review this section of the term paper will link the proposed

  The long-run aggregate supply curve can never shift

Evaluate whether each of the following statements is true or false. Explain your answer and provide supporting rationale.

  According to the law of comparative advantage

According to the law of comparative advantage, what should be the distinguishing characteristics of the goods a nation produces?

  How consumer as would the utility-maximization approach

Sometimes it is convenient to think about the consumer's problem in its "dual" form. This alternative approach asks how a person could achieve a given target level of utility at minimal cost. this approach will yield the same choices for this consu..

  Rent-seeking behavior results inaincreased economic

rent-seeking behavior results inaincreased economic activity by promoting efficiencyblower economic acitivity by

  Describe the following kinds of computerized information

health information systems can be divided into 4 categories clinical information systems management strategic decision

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd