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Evaluate the fundamental arguments between Keynesians and Monetarists concerning the level of government involvement in our economy to minimize the impact and stabilize the different stages of the business cycle. (Part B) Any change in the economy’s total expenditures would be expected to translate into a change in GDP that was larger than the initial change in spending. This phenomenon is known as the multiplier effect. Explain how the multiplier effect works. (Part C) You are told that 90 cents out of every extra dollar pumped into the economy goes toward consumption (as opposed to saving). Estimate the GDP impact of a positive change in government spending that equals $8 billion.
The city of Greenville is concerned about rising rent for low-income households. Several policies being considered. Suppose there are a large number of construction companies, Instead, suppose the government pays each firm $50 per low-cost house buil..
What is the importance of the World Trade Organization. What are the advantages/disadvantages of WTO member and those non-member. What are the five main operational aspects of a business.
Describe a market situation in which the operating company faces economic difficulties and the need to cut costs. What cost cutting strategies might the operating company use to remain profitable? What would be the benefits and drawbacks of each?
Assume the marginal propensity to consume for U.S. households equals .9, and the marginal propensity to import for the united states equals .1. Suppose an increase in investment of $10 million occurs at each level of income. What does the value of th..
The free-rider concept occurs when a person enjoys the benefits of a good or service without paying for it. Music files are nonrival and effectively nonexcludable, thus creating a free-rider problem. Do you concur that the best solution is for the co..
Explain how many histories/game tree nodes are there where P2 has to move? P1.
The higher a country's tax rates, the more likely that country will be:
what right have we to burden our children and grandchildren with these debts while we live high on the hog. Discuss this
Which of the following is not a motive for holding money in? Keynes's liquidity preference? theory?
U.S. is currently suffering from underemployment and excessive current account deficit. What measures can U.S. take to move away from its present situation towards internal and external balance? Consider rules of Bretton Woods and policy tools.
Consider the following short-run production function (where L =variable input, Q =output: Q = 10L - 0.5L2 Suppose that output can be sold for $10 per unit. Also assume that the firm can obtain as much of the variable input (L) as it needs at $2..
As additional units are produced, the marginal revenue product falls for all firms because marginal product decreases. For firms operating in industries that are not perfectly competitive, marginal revenue product also falls because
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