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Assume the economy is in long run full employment equilibrium with unemployment at the full employment rate of 6% and inflation of 4%. In this situation what would happen to aggregate demand and aggregate supply, unemployment, and inflation should the federal government cut business and individual taxes by 4 trillion dollars next year? Use the Phillips Curve and aggregate demand and aggregate supply to support your answer.
Bade & Parkin. (2015). Essential Foundations of Economics (7th Ed.). Pearson: Boston, Mass.
What is a financial system, and why would a country with a well-developed and fully functional financial system be better off than a country without it?
Suppose a firm uses 2 inputs to produce one output. Can you derive an optimality condition for conditional factor demand for the first input if the second factor is fixed in the short run How does it look like
Explain why there has been an increased use of risk-based auditing approach in recent years and what advantages for the auditors from the adoption of such an approach.
The injections-withdrawals approach, complete the table again and demonstrate that the point you chose in question 4 is the equilibrium now.
Explain why do economists believe that the CPI overstates the rate of inflation
The price of apollo perfume increases with an increase in demand. What is the relationship between the price and demand?
Explain which country has a comparative advantage in each good. Explain what will happen to the wage/rental ratios in both countries if they open to trade.
Make a separate diagram to show the answer, and describe what happens to equilibrium price and sales, explaining why or why not this makes sense in the real world
A new bridge is built, and a person now makes 35 trips per month to the center of the town rather than his or her former 25 trips per month. The time cost of the trip plus wear and tear on the person's auto declines from $4.75 before the bridge to $3..
Assume a country has been running a significant expansionary fiscal policy for several years. Monetary policy has not been particularly expansionary.
Describe the maximum insurance premium that the individual is prepared to pay.
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