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In the long-run framework, budget surpluses: A. should be run on a permanent basis since they boost saving and investment and stimulate economic growth. B. should be run whenever output dips below potential output. C. should never be run since they crowd out investment in the short run. D. are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment.
Assume a market with demand Q = 16p^(--2) that is supplied by a monopoly with costs C(Q) = 6 + Q2/8. 1. Calculate the equilibrium price, output and monopoly profits. 2. What
Illustrate the overview and importance of macroeconomics? After familiar with this illustration, able to know: a. An overview of macroeconomics is the study about the econom
GDP is an important indicator of a nation's economic performance. It has many components which contribute to the growth of the economy. Oil is a minor component of GDP and therefor
P and Y are both endogenous variables and according to the quantity theory of money we need P.Y = constant. If we divide both sides by P we get Y = constant / P. Because Y = Y D i
Reducing the budget deficit by cutting government spending could conceivably: A. increase income if interest rates rise enough and government spending is more productive than priva
Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
How can an economic development be measured? The UN has developed an extensively accepted set of indices to measure development in opposition to a mix of composite (element or
Macroeconomic policy Macroeconomic policy trade-offs are likely along the short-run Phillips curve however are not maintainable in the long run. In the short run a government
Q. Explain about Nominal wage level? In macroeconomics, we are usually not interested in the wage for a specific individual though in the average wage for all employed individu
TRADE IN SERVICES: India had objected to the inclusion of trade in services in the agreement for the UR negotiations. The Indian negotiations continued to raise object
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