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People's expectations about the future state of the economy (in other words, their general pessimism or optimism about the future) are very important in determining their current economic behavior. Given that, I've had students in the past suggest that, instead of giving people reliable information about the economy, it would be better for the government to lie and tell people that everything is fine, even when it really isn't. Discuss the merits of such an approach. Would the government be able to prevent a recession by lying about the state of the economy?
Tax-policy model assumes no autonomous tax. Derive an IS curve equation for an economy where taxes T are described by T = t0 + t1y: t0 being the autonomous tax level.
Henry initially consumes the quantity of pens and pencils shown as B in figure 2. After the prices of both goods change, he buys combination A. From figure 2 and these facts, it must be true that . . .
Price Controls: Give me an example of a Price Ceiling or a Price Floor and tell me what the effect is to quantity supplied and quantity demanded, will this create a surplus or shortage and in what, can it reach price equilibrium and why, and what the..
What is the impact of free trade on domestic job creation policy? Elaborate with examples. What are the impacts of outsourcing and off-shoring on trade liberalization (globalization) and economic structure?
The production function Q = 0.25X0.5 Y0.5 exhibits: a. constant returns to scale. b. increasing returns to scale. c. increasing and then diminishing returns to scale. d. diminishing returns to scale. 11. When PX = $60, MPX = 2 and MPY = 2, relative e..
The Deering Manufacturing Company's short-run average cost function in 2012 was AC = 3 + 4Q where AC is the firm's average cost (in dollars per pound of the product), and Q is its output rate. Derive an equation for the firm's marginal cost function.
Imagine you were to commit yourself to eating only food that was raised within 150 miles from your home (which is how everyone ate for most of human history, and is how most people in the world still eat). What would your diet be like in July? In Jan..
Greener Grass Company (GGC) competes with its main rival, Better Lawns and Gardens (BLG), in the supply and installation of in-ground lawn watering systems in the wealthy western suburbs of a major east-coast city. Last year, GGC’s price for the typi..
Consider a large country importing good X in the international market. The country is large enough to influence the international price for good X. Let the initial international price of good X be $100, where the country imports 100 units and produce..
Describe the size of public sector borrowing/public sector debt requirement. Autonomous consumption is 10 billion the marginal propensity to consume.
Utilize these values at this point on demand to make the subsequent computations.
what is the size of the bank's actual reserves. Required reserves are 10 percent of transactions deposits under the assumptions of the simple multiplier formula, then eventually the money supply will increase by.
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