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"A high level of public spending crowds out the level of private domestic investment. Therefore, if the government cuts its expenditures and free resources for private investment, it can ultimately increase income per capita" Comment on the statement
Think about all the economic data that are reported in the news every day. The information from all of them may be relevant, but does a policymaker really need to know any more about the state of the economy than the level of output and the inflation..
If there were only one seller, illustrate what would be the equilibrium price and quantity.
Unemployment spells and long term unemployment. According to the data presented in this chapter, about 47% of unemployed workers leave unemployment each month. What is the probability that an unemployed worker will still be unemployed after one month..
Under its present policy of purchasing 5,000 sinks per order, what is Plumbing Supplies total annual inventory cost? Calculate the Economic Order Quantity for Plumbing Supplies Inc.
A firm plan to borrow $900 via issuing debt instruments. The firm can issue a simple loan, a fixed-payment loan or a coupon bond. If the interest rate is fixed at 8%, the face value of the coupon bond is $1000 and the fixed-payment loan has 5 payment..
Assume that in addition to policy action described above, Fed decides to sell a massive amount of Treasury bonds from open market. Elucidate in detail effect of this policy action on size of money supply.
Explain the concept of Pareto Improvements and give examples from purchases you made during the last Christmas/Holiday season. Explain the term Deadweight Loss and cite an example of a market situation that would create such a loss.
Find the equilibrium price and quantity. Find the consumer and producer surplus at the equilibrium. Find the socially optimal level of output of paper. How can a corrective tax bring about this equilibrium? How much revenue would the corrective tax r..
If labor costs rise you may consider substituting capital input for labor input. What factors do you need to consider when making this substitution?
the economy is operating beyond the full employment output level thus producing rapid rise in prices of goods and
Illustrate what is the product maximizing level of output for this producer. Will the producer make a positive profit at this level of output.
When an incumbent maintains a price below the monopoly price in order to prevent entry. The act of charging a low price initially upon entering a market to gain market share.
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