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One could easily find either of the following explanations in the press for strong U.S. economic performance during the 1990s:
1. Low unemployment and a sizzling stock market have made American consumers feel wealthy and secure. Therefore, they have raised their spending to unprecedented levels, which has driven real growth rates to new heights.
2. The revolution in computing and telecommunication technologies has changed the way that things are made in this country. The result is the fastest growth of labor productivity since the 1960s.
a. Graph each situation using the AD/AS model, including the AD, SRAS and LRAS curves. Label equilibrium. Assume that each situation began in a recessionary gap.
b. Which one of these interpretations is most obviously consistent with Keynesian macroeconomic theory? Briefly explain your answer.
Proponents of these subsidies lobby government and argue that these subsidies are justified because there are positive externalities from people owning homes instead of renting. Perform a Google search to find what externalities these proponents c..
1. if the total issues in an economy are rs 450000 the financial interrelations ratio is 1.17 and the new issue ratio
"we oppose a nationsl market for pollution rights, as this would put an undue burden on low-income households who would no longer be able to afford to drive cars or heat their homes. instead, we propose that large corporations be required to reduc..
Edsel wins a $250 million lottery prize. The money is paid out in equal instalments over 40 years beginning one year from today. What is the present value of the lottery prize to Edsel in the following cases? 1) If his discount rate is 15%? 2) If his..
The demand for illegal drugs is inelastic. Much of the expenditure on illegal drugs comes from crime. Assuming these statements to be correct, What is the most effective way of decreasing the quantity of drugs consumed
Suppose that the price of labor increases, if the firms wishes to continue to produce the current level of output how will the firms optimal input choice change (relative to its current choice)? Support your answer with graph.
Oligopolistic models are based on behavioral assumptions. One behavioral assumption associated with differentiated product markets is that price increase will not be matched but price decreases will be matched. This rather pessimistic view of pricing..
you have been hired to manage a small manufacturing facility which has cost and production data given in the table
give the definitions for marginal rate of substitution mrs and the price ratio. then explain them in your own words
An econometrician has calculated that when a firm minimizes its total cost of producing output Q, it uses the following amounts of the inputs, L and K: These are the least cost combinations of L and K. The market wage and rental rates are given by w ..
Shares of consumption, investment, and government spending as a part of GDP. Use nominal GDP for these calculations. Biggest contributor in GDP.
Briefly describe the economic problem you have selected and assess the impact the problem poses to society
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