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Assume your local congressman calls you for some economic advice. He wants to sponsor legislation to increase public spending on such common medical interventions as because he’s been told early detection saves money:
Getting all children the right immunizations at the right time, before they turn 24 months,
Screening for hypertension
Screening for cervical cancer
Smoking cessation classes
How would you advise him?
Suppose a candidate who runs on a platform of soak the rich wins the 2012 presidential election. After being elected, he or she persuades Congress to raise the top marginal tax rate on the federal personal income tax to 65%.
For the country you examined in discussion 1, use the summary of types of economic systems to classify the economic system of the country. Is this an evolving economic system, i.e. a system in transition to another type of system?
Should China set a fixed exchange rate regime with respect to the US dollar, or a floating exchange rate regime with respect to the US dollar? Why? What are the advantages and disadvantages of each regime? Discuss.
Explain the concept of the multiplier, and explain the role of the marginal propensity to consume in determining the size of the multiplier. Explain how the size of the multiplier will change when one brings in the role of the marginal tax rate.
Why does the government intervene in the economy? Should they and what would the impact be if they did not?
If shoes and socks are complements and both are normal goods, show graphically what would happen to the consumption of shoes and socks if the price of shoes decreased. consumer incomes increased. Use the graph to visualize the changes.
Does the nominal interest rate adjust more than one-for-one or less than one for one to expected inflation.
Now suppose one big firm comes and buys out all of the firms in the cartel. This monopoly somehow miraculously is able to perfectly price discriminate. How much will this firm produce? What will be the deadweight loss created by this monopoly?
illustrate the effect of an increase in P2 on the consumption of both x1 and x2. Label income and substitution effects for both goods.
Derive and graph foreign export supply curve and find the price that would prevail in Foreign in the absence of trade. Allow Foreign and Home to trade with each other. Graph equilibrium under free trade. What is the world price and the volume of trad..
What would you expect to happen to the domestic money supply as R and y both increase along a stable BB curve? Explain in intuitive terms what forces would tend to bring about such a change in the money supply.
Should the CEO at Plain Truth cancel the audit and rely on a brief year-end summary from each sales account manager? Why?
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