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Question: Analyzing macroeconomic events with the IS curve (II): 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.
(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) A booming economy in Europe this year leads to an unexpected increase in the demand by European consumers for U.S. goods.
(c) U.S. consumers develop an infatuation with all things made in New Zealand and sharply increase their imports from that country.
(d) A housing bubble bursts so that housing prices fall by 20% and new home sales drop sharply.
It is mentioned that Whirlpool provides three different types of appliances that vary in the amount of features that are offered. Discuss the product differentiation across these types. How could this affect production costs negatively? Positively? W..
Where quantities represent the number of prescriptions. Assume that the resale or arbitrage among markets is impossible and that marginal cost is constant at $2 per prescription in both markets. Monthly fixed costs are $1million in the US and 500,000..
Does price equal or exceed average variable cost for the first 50 units? What is the average variable cost for the first 50 units? Does price equal or exceed average variable cost for the first 100 units? What is the average variable cost for the..
suppose a country that did not trade with the united states opened its boarders and purchased 100000000 worth of goods.
a monopolist has a constant marginal and average cost of 10 and faces a demand curve of qd 1000 - 10p. marginal
In a labor market in which LD = 600 - 4W, what is the elasticity value as wages change from $12 to $14 using the simple formula?
Describe a situation where prices have been held out of equilibrium due to government intervention in the market-the obvious ones discussed in the text are rent control and agricultural subsidies. You may use a specific example of one of these, or..
roshima is researching universities where she could study for her mba degree. she is considering 3 major attributes
What is the Laffer curve, and how does it relate to supply-side economics? Why is determining the economy’s location on the curve so important in assessing tax policy?
Analyze the most significant economic effects of the researched issues on healthcare industry. Provide at least two (2) examples of these issues to support your response.
a scientist testifying before a congressional hearing on the effects of estrogenic pesticides told every man in the
As we have learnt in the course aggregate demand is equal to C+I+G+(EX-IM) where the only difference with RGDP is that in the above equation I does not include accumulated inventories.
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