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Suppose the Congress decides to reduce transfer payments but to increase government purchases of goods and services by an equal amount. That is it undertakes a change in fiscal policy such that ΔG = - ΔTR
A. Would you expect equilibrium income to rise or fall as a result of this change? Why? Check your answer with the following example: Suppose that, initially, c=0.8, t=0.25, and . Now let ΔG = 10 and ΔTR= -10.
B. Find the change in equilibrium income.
C. What is the change in the budget surplus ΔBS? Why has BS changed?
The firm has access to a perfect credit market with interest rate r. What is the maximum price the firm is willing to pay for a fork lift?
How do these things affect the U.S market of foreign-currency exchange and on net capital outflow (NCO): A tax reform that imposes higher capital gains tax to Americans involved in offshore banking?
Assume that the pool of utilized textbooks grows further during the second year of the latest edition
determined the point price elasticity of demand at P=$3. What is the new point price elasticity if price is raised to P=$4.50? Comment on the change in elasticity
Between two production technologies firm can choose a new product line. If it installs expertise 1, it's annually costs.
Suppose in Belgium the opportunity cost of producing a trombone is 8 clarinets. In Denmark the opportunity cost of producing a trombone is 6 clarinets. Which country has a comparative advantage in the production of trombones?
If the interest rate is 8%, determine if the new column should be purchased. Solve by both present worth and annual cash flow analysis methods.
You are the manager of a local sporting goods store and recently purchased a shipment of 60 sets of skis and ski bindings at a total cost
q.1. as per concepts of production function indicate whether each of the following statements is true or false.
The economy begins in long-run equilibrium. Then one day, the president appoints a new chairman of the Federal Reserve. This new chairman is well known for her view that inflation is not a major problem for an economy.
Assume the firm is operating in a high-wage country, where capital cost is $100 per unit per day and labor cost is $80 per worker per day. For each level of output, elucidate which technology is cheapest.
Your sales are $63,000.00 and your stock is reduced by $27,000.00 worth of markdowns. Your receipts are $75,000.00. What is your ending inventory?
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