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Assume that a hypothetical economy with an MPC of 0.75is experiencing a severe recession.
By how much would government spending have to rise to shift the aggregate demand curve rightward by $50 billion?
How large a tax cut would be needed to achieve the same increase in aggregate demand?
Determine one possible combination of government spending increases and tax increases that would accomplish the same goal.
Globalization has changed world economy in many ways. One result of globalization is off shoring which has had its share of economic impacts on domestic employment as well as world employment.
A firm uses two inputs, unskilled labor (L) and capital (K) to produce its product. The wage rate for one unit of labor is $5, while units of capital cost $20.
Tangible would be the treatments themselves, i.e. the alterations they make. Intangible would be the uplifting experience, the sense of well-being, increased confidence etc.
Suppose a risk-averse consumer has an initial wealth of $5,000 and a utility function U(M) √M.. He faces an 80 percent chance of losing $4000, and a 20 percent chance of losing $0.
Explain why fiscal policy will be either more or less effective in an economy with a large foreign sector.
Explain why is an increase in the number of varieties of a good regarded as a gain from trade. Can you think of economic disadvantages associated with greater product variety.
Explain how does Global Intellectual Property Laws affect Telecommunication industry economic growth.
Describe the cutthroat competitors reasons for not raising or lowering his price, thereby accounting for the kink in his demand curve.
If price discrimination is feasible, which of these pricing approaches would you consider using market segmentation by location or time, two-part tariffs, limit pricing, penetration pricing.
A. if the rate discount is 20 percent, A. would you rather receive $ 100 today or $ 120 in one year ? B. would you rather receive $ 205 today or $ 240 in one year ? C. would you rather receive $ 500 in one year ?
Illustrate what extent should managers base their plans on the assumption that customers and suppliers are self-interested.
Explain how would you rate Ben Bernanke's performance as Chairman of the Federal Reserve.
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