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The supply-side effects of a tax cut arise because taxes act as (a stimulus/an incentive/a disincentive) to work, save, and provide entrepreneurial services.
The supply-side from from an increase in government expenditure arise because government expenditure increases the quantities of (public goods and services/transfers to the poor).
So, a tax cut increases people's (disincentive/incentive) to work, to save, and to provide entrepreneur services, all of which lead to an increase in aggregate supply and potential GDP.
Why innovation so important for firms to compete in many industries? What are some of the advantages of technological innovation? Disadvantages? Why do you think so many innovation projects fail to generate an economic return?
Suppose there are two industries, airlines (A) and breweries (B), and that the demand for secretatrial labor, E, in each industry is EA = 25 – wA and EB = 20 – 2 wB. If the supply of secretarial labor is E = 2 w, then what are the equilibrium wage an..
Discuss the role of risk and return in the pharmaceutical industry. In the U.S. health expenditures on drugs amount to about 10% of total health expenditures. In Japan, where physicians are legally permitted to sell pharmaceuticals, national expendit..
Analyze the effect of each scenario on the price of khaki pants. Think about how each scenario would affect the price of khaki pants. Create one graph that shows each of the demand-supply curves for the five scenarios listed in Step 1. Find the new e..
What economic circumstances and motivations led to the end of quantitative easing? Be specific. What specific motivations were behind the increase in the federal funds target?
the loan results in a new checkable bank deposit in a different bank equal to the amount of the loan, explain by how much could the total money supply in the economy expand in response to Tracy"s initial cash deposit of $500.
What effect wills an increase in interest rates have on supply and/or demand of unskilled labour. Would wage rates increase or decrease.
Imagine you are tasked with recommending an optimal mix for production and pricing of a product. How would you go about utilizing economic indicators and data to make that recommendation? Please use a specific product as an example in your initial po..
Using the broken window fallacy as described in “In The News” (p. 14 of Principles of Microeconomics), explain why some journalists, policy makers, and others proclaim that natural disasters are good for the economy in terms of eliminating old infras..
John is buying a new truck. The truck’s price is $30,000. The sales tax is 7% of the truck’s price and the title, license, and registration fee is $550 to be paid in cash. The dealer offers to finance 90% of the car’s price for 48 months at a nominal..
According to the augmented expectations hypothesis, if the yield on both one year bonds and two year bonds are the same, would you expect the one year yield in one year’s time to be higher, lower, or the same? Explain your answer.
Mari Sue, who is 16, crashes her mother’s car. Her mother is responsible for the damages caused by her daughter under A. contributing to the delinquency of a minor law. B. family car doctrine. C. failure to exercise proper supervision law. D. none of..
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