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Part A
1. Why is the money multiplier in the United States smaller than the inverse of the required reserve ratio? Provide one (1) reason.
2. Explain why depositing cash into a checking account does not change the money supply. Provide one (1) supporting fact.
3. Explain why the money supply does not change when one individual writes a check to another. Provide one (1) supporting fact.
Part B
1. Describe one reason why the flexibility of wages and prices tend to favor the Keynesian economic view in the short run and one (1) reason why the flexibility of wages and prices tend to favor the classical economic view in the long run.
2. Refer the figure below and explain what happens in each graph (A, B, and C) when an economy is moving from a recession (point a) back to full employment.
you have been hired as a consultant by your local mayor to look at the various market structures. your role is to
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In Central Texas College ECON 2301 , how do you calculate the final cumulative impact on spending?
How much output should be produced in each plant to maximize profit?
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Consider a hypothetical closed economy in which households spend $0.60 of each additional dollar they earn and save the remaining $0.40. The marginal propensity to consume (MPC) for this economy is and the spending multiplier for this economy is
Lumberjack Power, operator of a nuclear power plant, is planning to replace its current equipment with some that is more environmentally friendly. The old equipment has annual operating expenses of $6750 and can be kept for 8 more years. The equipmen..
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a explain how the four uses of output help us to determine the gdp.b calculate the gdp using only those numbers that
Alternative S has a first cost of $175,000 and a $40,000 salvage value after 5 years, but its annual M&O costs are not known.
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