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Explain how each of the following will affect the AD curve (shift left, or right, or no shift), and identify in each case the specific component(s) of AD that is/are affected: (recall: components of AD are C, I, G, and NX).
a. Feelings of job security among workers improve a lot.
b. Congress reduces income taxes for individuals and corporations.
c. European incomes are declining (their economies are in a recession).
d. The US dollar becomes weaker relative to other major currencies.
e. The general price level in the economy declines.
f. Businesses expect increasing profitability.
g. Households try to cut down on their debt.
Measure the income of Samantha on the vertical axis and the income of Oscar on the horizontal axis. Draw several of Sam’s indifference curves under the following circumstances. Sam doesn’t care about Oscar’s income, but the higher her own income is, ..
Regarding behavioral economics and social regulation: A. How has research in behavioral economics contributed to new and better social regulations? B. By definition, social regulations limit individual freedom and are paternalistic. Explain how a pol..
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A major state university in the South recently raised tuition by 12%. An economics professor at this university asked his students, "Due to the increase in tuition, how many of you will transfer to another university.
What is the trademinus−off that consumers face when buying the product of a monopolistically competitive? firm? If a monopolistically competitive firm has excess capacity.
The following demand and marginal cost equations represent the demand for some service inside the firm. At what price should the service be sold? Would it matter whether there was an external market for this service? The demand function P = 30−2Q. Th..
Look at the able Demand Schedule for Gadgets. The market for gadgets consits of two producers, Margaret and Ray. Each firm can produce gadgets with no marginal cost or fixed cost. If these two producers formed a cartel and acted to maximize total ind..
How do you understand the term “The Great Divergence”? List & explain the causes of The Great Divergence. Compare and contrast the factors that are mainly responsible for the growth convergence of East Asia and the growth divergence of “The Rest”. De..
In what specific way do growing populations and booming economics add to the challenge of reducing GHG emissions? To what extent might these characteristics explain the failure of some countries to meet their Kyoto targets?
Suppose that two consumers care only about the goods that they own. (The goods are private for them.) Starting from a competitive equilibrium allocation, is it possible for both consumers to be made simultaneously better off by trading with each othe..
What is the effective interest rate of an investment if the nominal annual interest rate is 2.09% and it is compounded semi-annually? Express your answers as a percent to two decimal places?
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