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What has Pres. Bush proposed for government expenditures in the case of a recessionary gap? What is the effect of his policies on the federal government budget? Please use the multiplier effect in your analysis.
Mention the four assumptions for the Monopolistic competition model.
Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?
Explain the impacts of an expansionary fiscal policy such as a tax cut on the levels GDP, Consumption, Investment, interest rate and unemployment and price.
The supply curve for labor is S L = 100W, where W is the market wage. The marginal revenue product curve for the firm is D L = -50W + 450.
Assume the government imposes a tax of $2.00 per unit to reduce widget consumption and raise government revenues. What will the equilibrium quantity be?
Draw a graph of the Batman family's supply of loanable funds curve fro 1999. Show the influence of this change on the Batman's supply of loanable funds curve.
What were some of causes of stagflation of 1973 and 1979? In what ways were these episodes of stagflation different from great depression of the 1930s?
The economy of a country called Econoland is described by the following desired aggregate expenditure components (all figures in billions of $). For the purposes of this question, the first set of equations will be referred to as fiscal policy1.
Using the IS/LM/BP model, demonstrate the effect of each of the following changes. Assume that the economy is a small country with perfect capital mobility and a flexible exchange rate.
With the help of an AD-AS diagram, explain the effect on the price level and real GDP. Use an upward sloping AS curve and be clear about the interconnections among markets.
Suppose Congress wishes to reduce the budget deficit by reducing government spending. Use the IS-LM model to illustrate graphically.
Find the optimal level of inputs L* and K* that minimize the cost of producing Q0. What is the cost of production associated to L* and K*?
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