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If income falls below its potential and the income tax rate is reduced, this will: A. raise the passive deficit but reduce the structural deficit. B. raise both the passive and structural deficits. C. reduce both the passive and structural deficits. D. reduce the passive deficit but raise the structural deficit.
1. Suppose that the supply curve for school-teachers is LS = 20,000 + 350W, and the demand curve for schoolteachers is LD = 100,000 - 150W, where L = the number of teachers and W =
The circular flow of income in an open economy An open economy is one in which international trade exists. Assume also that there is government spending and taxation. Thus
Summary of the cross model The below list summarizes the cross model and associates it to classical model: Labor Market: Real wages W/P is exogenous in cross model
What is independent monetary policy Advantages: First, in a freely-floating exchange rate, the exchange rate must move down or up to correct a payments imbalance. Second, monet
What are the three methods that societies have used to allocate their scarce resources? Give an example of each method. Give an example of a good that uses all three methods at onc
An electronic chip is to be implanted in the body. During in vitro (in the lab) testing it is observed that the chip will dissolve over time if exposed to liquid with similar pH to
Including different interest rates with different maturities would complicate the models however it wouldn't buy you very much. Because interest rates with different maturities are
give and explain the different causes of national income variation
Product A is an end item and is made from two units of B and four of C. B is made of three units of D and two of E. C is made of two units of F and two of E. A has a lead time o
how the theories of trade cycle affects in the business
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