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Suppose that a household in a two-period model has income of $30,000 in period 1 and $25,000 in period 2, and the interest rate is 75%. Assume that the price of the goods $1 in both periods. Suppose that the household decides to consume $26,000 in period 1 and $32,000 in period 2. Now suppose that the interest rate falls to 50%, and the household decides not to borrow or lend at all. Is the household better off or worse off with the higher interest rate?
Most macroeconomists believe it is a good thing that taxesact as automatic stabilizers and lower the size of themultiplier. However, a smaller multiplier means that the change ingovernment purchases of goods
Suppose that in small open economy the following describes investment demand, private saving, and government budget deficit.
Why might a parent company like McDonalds or Hilton choose to franchise its local outlets rather than own them and staff them with employees In many smaller cities all McDonald's outlets are owned by the same franchisee.
In the class, we discussed the Paradox of Thrift argued by John Maynard Keynes. According to the argument, even if many household decide at the same time to increase their saving, the total saving will not increase in the long run, while it leads ..
Illustrate what happens to an individual person's demand curve for BlackBerry phones as the number of other Blackberry users declines.
Prepare a memo to the managing director that explains the different vehicles available that can be used for each of the Minimize income tax
Discuss on social diversity and business ethics and how has a more diversified labor force affected the corporate structure and economy?
What are the highest and lowest payments from the writer that the beekeeper=farmer team will accept for the sixth day Assuming that the farmer can dispose of $7 of the writer as she wishes, what range of payments will the beekeeper accept
The highest valued alternative sacrificed as a result of a choice is: Answer the opportunity cost, which can be objectively measured by anyone. the opportunity cost, which can only be subjectively measured by the individual who chooses.
Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment.
Determine which is true of leakages and injections in the circular flow, the consumer price index measures changes in
The only other costs associated with manufacturing and distributing Brand X chips are the costs of raw potatoes, peanut oil, and bags; last year FoodMax spent $2.8 million on these items, which were purchased in competitive input markets. Based on..
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