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Assume that investment is highly insensitive to the interest rate. Explain what the effects are on interest and income of an increase in government expenditure (G). Which component(s) of aggregate demand are crowded out (i.e., reduced)? Use an IS-LM diagram to support your answer.
Suppose government spending increases in a closed economy. Would the effect on aggregate demand be larger if the Bank of Canada took no action in response, or if the Bank were committed to maintaining a fixed interest rate.
Two identical countries, A and B, can be described by the IS–LM model in the short run. The governments of both countries cut taxes by the same amount. The Central Bank of A follows a policy of holding a constant money supply. The Central Bank of B f..
Suppose the Federal Reserve Bank adopts expansionary monetary policy. Using the graph of supply and demand for the market of short term Treasury securities, show graphically and breifly explain what happens to the price of short term treasury securit..
Illustrate what might you call an outward shift of a nation's production possibilities frontier.
The problem below asks about the oil price increase from 1973-1980. We have also seen this in 2005 and 2010, although not as dramatic a price increase. During this energy crisis, Congress considered imposing an “excess profits” tax on oil companies. ..
Managed care has had a significant impact on the delivery of behavioral halth services. This has influenced the way that the behavioral health industry conducts business.
Long-run competition. Most of the cost of a new airplane is in the research and development and in building production facilities. By contrast, the marginal cost of producing another plane is relatively low. a) (2 points) You have been hired by Boein..
Draw the supply and demand curves on the same diagram. Determine the equilibrium price and quantity and demonstrate it in your graph. Calculate the ARC elasticity of demand when the price move from $6 to$10
How could vendors be encouraged to participate in Wal-Mart China’s sustainability initiatives? What are the distinguishing features of Wal-Mart China’s distribution system? How can Wal-Mart improve sustainability in its distribution and retail operat..
Use the two big questions of economics and the economic way of thinking to answer the following questions about the economic life of a homeless man.
Outline the Hecksher-Ohlin, Specific Factors, and Ricardian models of Comparative Advantage. How do they differ? Which do you think is more empirically attractive?
It takes a phlebotomist 10 minutes to complete a blood draw. The supplies for each draw cost $5 and the phlebotomist earn$25 per hour. the phlebotomy lab is designed to accommodate 24000 draws per year. its rent is 100,000 per year. what are the aver..
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