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The US government decides to reduce the government budget deficit by increasing taxes and keeping government expenditures at the existing level.
a) What are the effects of increasing taxes in the short and medium run for the US economy?
b) Is it possible to change the natural rate of unemployment (the natural level of output)? How?
The US economy should be analysed as an open economy with flexible exchange rates.
Hint: The AD relationship in the medium run is: Y = Y(M/P, EP/P*, G, T)
Dranove and Wehner (1994) argue that the statistical evidence used to support the supplier induced demand hypothesis is invalid because they find that the same statistical techniques also suggest that obstetricians induce demand. Briefly explain the ..
You are working as a student assistant for an engineering firm and are paid by the hour. Every two weeks, you turn in a time sheet to your supervisor, and three workdays later, your paycheck is direct deposited into your checking account.
If the government purchases also taxes are both increased by $100 billion simultaneously illustrate what will the effect be on equilibrium output.
If B accepts, the division is implemented. If B rejects, each player obtains their outside option. Assume that if a player is indifferent between a proposed dividsion and his or her outside option, then the player accepts the division.
In 2001, the economy of the United Kingdom exported goods worth £192 billion and services worth another £77 billion. It imported goods worth £225 billion and services worth £66 billion. Calculate the U.K. merchandise trade deficit for 2001. Calculate..
Which of the following are likely to increase the value of the firm, based on the shareholders wealth-maximization model?
Suppose instead that the station seeks to maximize its profit from sales of the DVDs. What price should it charge. How many DVDs should it order from which supplier.
explain how the short-run phillips curve the long-run phillips curve the short-run aggregate supply curve the long-run
Use a supply-demand graph to demonstrate how the quantity and price of medical services are expected to be affected if we went from a world without insurance to a world where the government covered 90% of all medical costs.
Explain how demand for time travel, as well as marginal income, long-run marginal cost also long-run average cost.
Elucidate situations which use the IS-LM-FX model to illustrate the effects of the shock. For each case, state the effect of the shock on the following variables.
By what percentage would GDP be boosted if the value of the services of stay-at-home spouses were included in GDP
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