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Assume the marginal propensity to consume = .8, and government purchases increase by $.2 Trillion.
1. Potentially, how much will real GDP increase in the short-run after the increase in government purchases?
2. Besides government purchases, what and how much did another spending category increased due to the multiplier described above? Explain?
Consider the following: The city council has just approved the construction of a water park in your town. You are responsible for studying the impact of the new water park on the l
Some scholarly papers have shown that growth from trade in developing nations can make the country worse. Can this happen? If so, describe the conditions required for this situatio
Question : The long-run position of an economy is described by the quantity theory of money: M/P = L (Y, r) Where M: nominal money stock; P: price level; Y: real income a
Sara runs a small business assembling personal computers. This table shows her total cost at different levels of output. Number of computers produced
Would it be more efficient if more firms could produce Vista? Would Microsoft have spent the money to develop Vista if it didn't hold a patent--that is, if once it developed Vista,
Factors Responsible for changes in Aggregate Demand The Aggregate Demand curve shows an inverse relationship between the quantity of goods and services demanded and the price l
Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0
Determine about the Expected inflation Note that it is changes in prices during 2008 which matter for the high real interest rate (the time period when your deposit is earning
Explain a circular flow of income in a frugal econmomy with diagram
developing countries benefit through international trade from developed countries
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