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A government is recently operating with an annual budget deficit of $40 billion. The government has determined that;
--The marginal propensity to consume is 0.75.--To eliminate an inflationary gap and take into account the resulting change in the price level, the government must generate a net leftward shift in the aggregate demand curve equal to $40 billion.
Suppose that there are no direct expenditure offsets to fiscal policy, how much should the government increase taxes? Explain by giving appropriate reasons.
In national income accounting identity showing the equality between national saving and investment, what is the representation of private saving and what is the representation of public saving?
A profit maximizing firm produces three products X, Y and Z. The firm has no costs. There are three customers 1, 2 and 3. What will be the price of each product if the firm decides to sell them separately?
Illustrate what will happen to the input prices wages (w) and rental rate of capital (r) after this change in technology.
Proponents of trade liberalization which freer trade might actually improve the quality of the environment.
From the following information, find the marginal propensity to consume, compute the expenditure at each level of GDP, and find equilibrium GDP:
Using the exchange rates and prices in the tables above:
Explain why is it that a firm in a perfectly competitive market can sell as much as it wants without a change in price occurring? As a result, what is the elasticity of demand affecting the firm then.
Explain briefly how a change to the following MS, MD, or P would shift LM function to right. Include in your discussion whether the variable would have to increase or decrease to cause the rightward LM shift.
The cost of digital cameras calls. What happens to the demand for memory card. What happens to the demand for digital cameras.
What is the opportunity cost of going to a doctor to be examined for skin cancer? Would eliminating research reduce or increase the cost of U.S. health care?
Describe the effects of monetary policies on the economy's production and employment.
If you were an economist for Mattel, manufacturer of the doll Barbie, determine which was making an unsolicited bid to take over Hasbro, manufacturer of G.I. Joe,
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