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If society wants aggregate demand to increase without changes in the price level, then there must be a)a gap between full employment and the current level of real GDP and an increase in autonomous spending b)an increase in autonomous spending and a horizontal short-run aggregate supply curve. c) an increase in autonomous saving so that autonomous investment spending can increased) an increase in autonomous spending combined with an increase in the marginal propensity to save
For each hour of work, the employer deducts $1 and sends the money to the city government. The initial wage (Before the tax) is $10, and total employment is 20,000 hours per day. Use a graph to show the effect of the tax on the equilibrium wage an..
As all points on a contract curve are efficient, they are all equally desirable from a social point of view.
Illustrtae what does this imply about the effectiveness of monetary and fiscal policy to reduce the unemployment rate.
Assume that your firm above is the N.Y. Yankees and the league owners impose a lump sum tax of $4 million dollars on your firm.
Suppose you own a home remodelling company. You are currently earning short-run profits. The home remodelling industry is an increasing-cost industry. In the long run, what do you expect will happen to
The theory of purchasing-power parity primarily explains 1. why a change in the real exchange rate changes a country's net exports. 2. why trade deficits tend to move to zero over time. 3. how foreign prices affect domestic prices. 4. the determinati..
Elucidate what is the difference among real GDP and nominal GDP.
If average variable price are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits.
Explain the difference between demand pull inflation and cost-push inflation, illustrating your answer with examples of each
New Light Inc. has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the marketplace.
Engineers at the national research laboratory built a prototype automobile that could be driven 180 miles on a single gallon of unleaded gasoline.
Explain how is it that monetary policy, such as open market operations.
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