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Consider an economy in which autonomous consumption is 800, the marginal propensity to consume is 0.8, investment is 400, government spending is 500, taxation is 400, and net exports are 100.
A. What is the equilibrium GDP in this economy? Show your work.
B. What is the savings at this level of GDP? Show your work.
C. What are the spending and tax multipliers? Show your work.
D. If government spending increases by 200, what is the new equilibrium GDP and what is the increase over the original equilibrium GDP? Show your work.
E. If the government increases both spending and taxation by 200, what is the new equilibrium GDP and what is the increase over the original equilibrium GDP? Show your work.
An alternative to rent-control laws that would not reduce the quantity of housing supplied is:
Suppose the city eliminates its restrictions on books stores, allowing additional stores to enter the marketplace.
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Express Illustrate what will happen also why to the firm's average fixed costs, marginal costs, average costs also profits as the firm makes its choices.
How do things change based on this scenario?*The market for hybrid cars is changing. There are more providers but due to bad publicity and poor performance, demand is falling.How do I set up a graph with this information?
Suppose that the economy consists of only two individuals, Leland has $1290 available to spend on goods. He decides to purchase $530 worth of produce from Krista in the current quarter. No other economic activity takes place during the current quarte..
Suppose demand for a good is QD = 50 - P and supply is QS = -10 + P. How much is the producer surplus? How much is consumer surplus?
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The tools of monetary policy for altering the reserves of commercial banks are the
Assume that the job separation rate s is 0.01 (1%) per month and that the job finding rate f is 0.2 (20%) per month. What is the steady state unemployment rate for this economy? In the table from the previous scenario, how many periods does it take f..
Elucidate the disadvantage of the simultaneous lending strategy. Be mindful of the group lending scheme which Grameen Bank adopts.
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