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Assume that you have an economy that is in the early months of a recession. Unemployment is 7.2% and rising. Inflation is at 1.2% and relatively stable at the level. The GDP is at $13.6 trillion. Assume that you are on the Council of Economic Advisors which is the group that advises the President on economic policy issues. It’s your job to propose an Expansionary Fiscal Policy to help alleviate the problems associated with the recession.
1. Consider a policy based on Taxes. Develop a policy that will help get the economy out of the recession using only changes in taxes. You don’t need to get into changes in specific types of taxes but you do need to explain whether taxes should increase, decrease or stay the same. Be sure to explain why the policy will be successful.
BK Books is an online book retailer that also has 10,000 "bricks and mortar “outlets worldwide. You are a risk-neutral manager within the Corporate Finance Division and are in dire need of a new financial analyst. You are very impresses with the firs..
Your firm’s research department has estimated the income elasticity of demand for Art Deco lawn furniture to be -0.85. You have just learned that due to an upturn in the economy, consumer incomes are expected to rise by 5 percent next year. How will ..
q1. josephine makes 100 a day as a flower shop attendant. she takes off two days of work without pay to travel to
some games of strategy are cooperative. One example is deciding which side of the road to drive on. It doesn't matter which side it is, as long as everyone chooses the same side. Otherwise, everyone may get hurt. Is there a Nash equilibrium in this g..
An auto-part manufacturer is considering establishing an engineering computing center. This center will be equipped with three engineering workstations that each would cost 25,000 and have a service life of five years.
If the foreign country enters the market first, determine the equilibrium price and quantity. Will both countries produce. Show both average cost curves and the equilibrium.
Apple has chosen to have the components for the iPhone manufactured by more than 30 companies around the world, as opposed to producing everything itself. Address the three basic economic questions: How does this choice determine what, how, and for w..
Explain how "discretionary fiscal policy" can be "countercyclical" and can be used to support aggregate demand. Us an AD/AS model to support your answer.
Given the current state of energy use, which continues to grow exponentially in such countries as China and India, what measures can the United States and other Western countries take to produce more fuel-efficient and environmentally friendly fuels?
Suppose the price of airfare from SFO to JFK increases from $330 to $360 while no other variables change. In consequence, the quantity of tickets sold decreases from 180 to 140. Calculate the absolute value of the price elasticity of demand. (Hint: u..
Skyscraper City has a subway system, for which a one-way fare is $1.50. There is pressure on the mayor to reduce the fare by one-third, to $1.00. The mayor is dismayed, thinking that this will mean Skyscraper City is losing one-third of its revenue f..
If you are unable to come up with a choice of your own, then you may choose the merger of Hewlett Packard and Compaq Computers from about 10 years ago. When the merger was announced, it was widely criticized as not making 'economic sense.' The merger..
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