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Assume there is an increase in taxes by $5 million and no change in government spending. Answer the following and demonstrate your answers using a diagram. (Note: make sure you label everything in the graph correctly, and link it to your written explanations)
a. What effect will this have on the demand and supply of loanable funds? How will this affect the real interest rate and the quantity of investment?
b. Is the change in equilibrium investment the same, more, or less than the initial change in government spending? Why?
c. Now consider that, in addition to the original decrease in taxes there is an increase in government spending of $15 million. How would your answer in part a. change? Show it in a diagram.
As asset is purchased in September and is being depreciated over 7 years using MACRS 200% Declining Balance depreciation switching over to Straight Line Depreciation, witht he mid month convention. In what year should the depreciation method be switc..
Sam Musso is planning to retire in 20 years. He can deposit money at 8% compounded quarterly. What deposit must he make at the end of each quarter until he retires so that he can make a withdrawal of $45,000 semiannually over five years after his ret..
q1. clarify how do you find the changes in quantity demand changes in quantity supplied changes in demand as well as
A nation that imposes tariffs on imported goods may find its welfare improving should the tariff result in a favorable shift in the terms of trade. Explain
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