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Q. (a)The Economist on the 14th February 2008 printed the following: "More recently, the post-mortems on America's 2001 fiscal boost have been positive. By luck more than by design, the income-tax rebate was well timed (Mr Bush had promised to cut taxes long before the recession hit). It also seemed to work. One study suggested that people spent between 20-40% of their rebate in the quarter in which it was received, and over 60% of it within six months. Poorer, more credit-constrained people spent a higher share of their rebates". The article touches on two crucial conditions for a fiscal stimulus to work. What are they? How does a fiscal stimulus work in principle? Explain your answer with the help of diagrams (AD-AS or Keynesian Cross).
(b)What are the three most important factors driving economic growth? Explain briefly using an appropriate example.
If Rob and Nate are the only people who purchase discs, graph the aggregate demand for discs and write down the equation for this aggregate demand function.
For every firm in group B , long-run ATC curve is U-shaped and intersects the long-run MC curve when ATC = 10 and output is 6.
A Fenway park, home of the Boston Red Sox, seating is limited to 39.000. Hence, the number of tickets issued is fixed at that figure. Seeing a golden opportunity to raise revenue.
Free zone would happen if the central bank lowered the federal funds rate and buy securities on the open market.
Where does the national unemployment rate stand relative to the Natural Rate of Unemployment
What is a one invention that had good impact on the international economy and why. What were the impacts of this invention were impact good or bad.
Why would we expect that the price elasticity of demand for the product of an individual firm would typically be greater than the price elasticity of demand for the product overall.
Suppose that investment decline by 40 units to a level of 60. What will be the new level of equilibrium income.
Idea that a country can simultaneously pursue only two of the three following policies: free international-capital flows, monetary policy for domestic stabilization, and a fixed exchange rate.
What price are individuals with $5,000 in the bank willing to pay for the insurance. Will those with $5,000 in the bank voluntarily purchase insurance.
Divide the Banzhaf power index by the number of votersin state. Are votersin small states or are votersin big state more powerful, according to this measure.
You are asked whether current antipoverty policy meets three generally accepted goals of helping, minimizing cost, preserving work incentives also what changes you would favor and why.
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