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Suppose that government spending makes private Örms more productive; for example, government spending on roads and bridges lowers the transportation costs. This means that there are now two effects of government spending, the Örst being the usual effect of G we discussed in class and the second being similar to an increase in the nationís capital stock K.
(a) Show that an increase in G that is productive in this fashion could increase the welfare of the representative consumer.
(b) Show that the equilibrium effects on consumption and hours worked of and increase in G of this type are ambiguous but that output increases.
Assume that private schools want to maximize profits and that the market for private schools is perfectly competitive.
demand for its tennis balls by using the subsequent linear specification
Economic laws are established in order to make successful prediction of the outcome of human action.
A political campaign manager must decide whether to emphasize television advertisements or letters to potential voters in a reelection campaign.
Is it advantageous for all countries to utilize cheaper labor or does importing your goods.
Kramer Smith owns a dry-cleaning service also is thinking about changing his advertising expenditures for the year.
A social scientist claims that the average adult watches less than 26 hours of television per week.
What are the components of aggregate expenditure. What determines the slope of the aggregate expenditure line.
Illustrate what is the maximum and minimum subscription price. If the subscription price is set at $48 per share how many shares must be sold and how many rights will it take to buy one share.
Policymakers should have a detailed knowledge and profound understanding of all theoretical models and should design economic policy based on that knowledge.
Frequently result from radioactive transportation accidents due to the large number of such shipments
Illustrate how much will they have accumulated principal plus interest when they reach 65 years old. What is the moral of this situation.
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