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The model of the market for loanable funds shows that an investment tax credit will cause interest rates and investment to rise. Yet our model of how investors behave claims that higher interest rates lead to lower investment. How can these two opposing statements be reconciled?
Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy’s marginal propensity to consume is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 bi..
q.assume which the economy is in a long-run equilibrium.a- draw a diagram to illustrate the state of the economy .be
Under what conditions would firms be likely to support an industry-wide advertising ban. Please provide a few examples.
Set up a Ricardo-type comparative advantage numerical example with two countries and two goods. Distinguish “absolute advantage” from “comparative advantage” in the context of your example. Then select an international terms-or-trade ratio and explai..
Why might some firms voluntarily pay workers a wage above the market equilibrium, even in the presence of surplus labor?
Show an expression for average cost. Derive an expression for marginal costs. Is there any range of production characterized by scale of economies.
Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 20,000 bottles of wine were sold every week at a price of $4 per bottle. After the tax, 13,000 bottles of wine are sold every week; consumers pay $5 per bottle, ..
An individual, who has income I, cares only about two goods: X and Y. Their prices are Px and Py, respectively. The individual's utility function is U(X,Y)=aln(X)+(1-a)ln(Y).
Elucidate how many of the variable input should the firm utilize to maximize profits? Please verify. Note which in order to do this you want to utilize costs.
What must happen to induce foreign residents to buy the bonds? If foreign residents desire to purchase the bonds, what is the most important source of dollars to buy them?
John’s preferences over toothpaste (good 1) and beer (good 2) are represented by utility function u = ln x1+ x2. Prices are given by p1 and p2, and he has income of m. What fraction of his income does he spend on toothpaste?
Unemployment according to Marx could be classified as what type of unemployment?
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