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Suppose the consumption function is C = $500 billion + 0.8Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially (before multiplier effects) with
(a) A $50 billion increase in government purchases? $ billion
(b) A $50 billion tax cut? $ billion
(c) A $50 billion increase in income transfers? $ billion
What will the cumulative AD shift be for:
(d) The increased government spending? $ billion
(e) The tax cut? $ billion
(f) The increased transfers? $ billion
Select a project from IBM’s recent academic collaborations. Describe in a paragraph what this project is. Go back to the IBM front page, find “Investor Relations” at the bottom of the page. Go to IBM’s most recent annual report. How much did IBM spen..
The competitive rental rate of machines (capital) is the sum of forgone interest and depreciation costs the machine’s owner must pay for one period. In the case of machines that do not depreciate, the competitive rental rate of machines (capital) is..
It is sometimes suggested that the government should actively pursue an industrial policy. Explain what this means and discuss the advantages and the disadvantages of such a policy. 2. Suggest four policies to promote growth. How is it related to the..
Why is money now not the same as money later? Briefly describe two of the roles assigned to interest rates. What determines land rent? Describe one of the key assumptions.
Potential buyers within a segment should be:
Explain how much profit will the perfectly competitive firms earn. Explain how much profit will the monopoly firm earn.
Suppose that the firms in an oligopolistic market engage in a price war and, as a result, all firms earn lower profits. Game theory would describe this as what?
Illustrate why did official money lose its meaning in Germany during the 1920s. What did the German government do or not do.
If you have four years child by the time he/she turns eighteen and you need a 100,000 for them and the interest rate is 4%. How much you need to save now? What is the present value? Andrew has $500 he put the side $500 semi annual and he planned to k..
President Clinton has seized upon the cigarette excise tax as an expedient and politically correct means of increasing federal revenue.
The market equilibrium wage is currently $12 per hour among hairdressers. At that wage 17,323 hairdressers are currently employed in the state. The state legislature then sets a minimum wage of $11.50 per hour for hairdressers. If there are no change..
There is an old saying about the benefits of Marriage - that "Two can live as cheaply as One". What economic principle substantiates this claim? Diminishing marginal returns Law of Supply Economies of Scale Economies of Scope.
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