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Assume that capital is perfectly mobile, the price level is fixed, and the exchange rate is flexible. Now let the government increase purchases. Explain first why the equilibrium levels of output and the interest rate are unaffected. Then show whether the current account improves or worsens as a result of the increased government purchases of goods and services.
What is achieved by selecting the quantity of an activity at which marginal benefit equals marginal cost?
Kamini consumes tacos and burritos. Suppose her marginal utility for tacos and her marginal utility for burritos are constant @ 4. Also, the price of a taco = $1.00, price of burrito = $2.00 Kamini's income (budget) = $20.00
If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by what percentage would your real income increase and what would be the change if the nominal income rose by 2.8 percent
There is a belief that a person's performance on the GMAT (entrance exam to get into graduate school) can be predicted by their undergraduate GPA. Based on regression analysis what are the following values, (Round to three decimal places; put it ..
Caleb bought a car for $6,900. He agreed on a five- year loan at a 5.4% interest rate.
Fancy Gadgets, Inc. has developed a new Thing-A-May-Jig at a cost of $2,000,000. Projected profits from the sale of Thing-A-May-Jigs for the next five years are: $300,000, $400,000, $500,000, $600,000, and $250,000. At the end of the fifth year, t..
Calculate the price elasticity of demand at each of these quantities using the formula that includes the slope of the demand curve: Q=1; Q=2; Q=3; Q=4, Q=5. Is the elasticity constant as we vary Q
Find a current event article (dated within the last 6 months) that addresses fiscal policy issues in the United States today. Explain the problem and the recommended strategies being debated.
Deluxe Carpeting a leading manufacturer of carpeting sold 28 million square yards of carpeting at a price of $16 per yard. This year, GNP per capita is expected to fall from $19,000 to $17,000 as the nation enters a recession. Deluxe expects that ..
Kim deposits her annual bonus into a saving account that pays 8% interest compounded annually. The size of her bonus increases by $2,000 each year, and the initial bonus amount is $5,000.
The four-firm concentration ratios for industries X and Y are 89 percent and 62 percent, respectively, while the corresponding Herfindahl-Hirschman indexes are 2,600 and 1,200. The Dansby-Willig performance index for industry X is 0.6
The U.S. Army Corps of Engineers is considering the feasibility of constructing a small flood control dam in an existing arroyo. The initial cost of the project will be $2.2 million, with inspection and upkeep costs of $10,000 per year.
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