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Show (provide the derivation and explain) why the slope of the indifference curve equals the ratio of marginal utilities. Then show graphically and explain why the optimal consumption point is where the ratio of prices equals the slope of the indifference curve.
In a typical year, changes in government spending compared to overall spending are relatively. The time necessary for a fiscal policy plan to have an impact is called a(n). The primary tools of fiscal policy are
Consider the following simple model with investment and government spending exogenous: Derive the change in Y associated with an increase in taxes T. Show the results graphically and algebraically. What is the tax multiplier?
Most economists A. apply the assumption that people behave as if they act rationally with an aim to maximize utility. B. apply the assumption that people rarely behave as if they act rationally although they do aim to maximize utility. C. rely on see..
Assume an economy where there are two producers: a wheat producer and a bread producer. In a given year, the wheat producer grows 30 million bushels of wheat of which 25 million bushels are sold to the bread producer at $ 3 per bushel, and 5 million ..
The Bank of England has switched from interest rate cuts to "quantitative easing" This policy involves buying bonds from commercial banks in the hope that these institutions will again lend in vast quantities to businesses and individuals after sitti..
1. discuss the pros and cons of central banks setting policy based on rules as opposed to setting policy based upon the
Suppose the exchange rate between the U.S. dollar and the Mexican peso was $1 = 5 pesos. A can of Pepsi sells for $2 in Boston and 12 pesos in Mexico City.
The following events happens in order: 1. Fed bought $100M in bonds from Bank A 2. Bank A then use $40M to buy bonds from bank B, and lend out $60M to a person A 3. Bank B holds everything as excess reserves. Person A withdraw $5M. Calculate the chan..
As China presumes to surpass the American level of GDP, how do you assess the prospects for their future? How likely is this economy to achieve efficient outcomes and lasting prosperity?
Discuss the pros and cons of free trade, considering the perspectives of both advocates and critics.
Chapter 2 An example of a case power to the people. Figure 2-6 contains snapshot of excel spreadsheet. What is the formulas used to calculate figure 2-6. Please assist.
Compute a 99% confidence interval rather than a 90% confidence interval. The increase in confidence indicates that we have a better interval.
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