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Consider the multiplier model we have studied in class. Assume that the economy is initially in equilibrium and that real income is $180. The marginal propensity to expend is 0.66. If autonomous exports have just fallen by $20, what will happen to equilibrium income? What about unemployment? Show the adjustment process to the new equilibrium using a graph.
Suppose that the market labor supply and labor demand equations are given by Qs = 5W and Qd = 30 - 5W. If a minimum wage is set at $4.00 (W = 4), then how all step by step.
Determine the Gross domestic product Gross domestic product is the total value of an economy's domestic output of goods and services. Gross national product is the similar as
How credit is created or the creation of credit
Explain the chain reactions (primary and secondary effects) and show graphs of the following variables: (i) taxes increases, (ii) government spending increases and (iii)repo ra
Overnight interest rate of Central banks When the central bank buys government securities, it purchases from many individuals, companies and institutions. Deposits and reserves
Consider the following utility function: U = X 1 X 2 Where X 1 and X 2 are quantities consumed of two goods. You are considering the actions of a consumer that maxi
EXPLAIN THE 5 SECTOR MODEL (OPEN ECONOMY) IN INCOME DETERMINATION
The prices of fresh fruits have risen recently in the Jackson area. Why would this have occurred? Explain.
Q. Show the advantage and disadvantage of money? Money has one significant advantage and one disadvantage compared to bonds: · Advantage: Money is more liquid than bond
Fiscal Policy An Increase in Government Spending: Figure 1 Let us examine how an increase in government spending affects the interest rate and the level of income.
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