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Suppose the consumption function is C = $400 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
Instructions: Enter your response as a whole number.
(a) A $50 billion increase in government purchases? $......... billion
Instructions: Enter your responses rounded to one decimal place.
(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
A country has a comparative advantage in a good if
In the summer of 2010, Congress passed a far-reaching financial reform to prevent another financial crisis like the one experienced in 2008-2009. Consider the following possibilities: Show the consequences of the policy in this situation on a new gra..
A student investment club, The Millionaires Club, is considering purchase of a security for the club. The current earnings per share is $.75 and is expected to increase by $.05 each year into the future. If 30-year government bonds are paying 4.6%, w..
Proviade two examples of actions taken by a company, government, or organization whose effect is to prevent specific markets from reaching equilibrium.
If countries are first ranked by level or real GDP per capita, and then by the value of the Human Development Index, would you expect the ranking of countries to be similar or different? What are the short-run and long-run effects on an economy of a ..
Metro Airlines runs 10 flights per day at a total cost of $50,000, which includes $30,000 in fixed costs for airport fees, airplanes, and the reservation system and $20,000 invariable costs for flight crews, fuel, baggage handlers, and food service
Use graphs to derive the LM curve for each of the following cases: (a) the central bank targets the money supply (b) the central bank targets the interest rate (as it does now) (c) the economy is in a “liquidity trap” because the demand for money is ..
Should Roscoe's Rascals match the price offered by the competitor.
Do you know which states have the highest unemployment rate right now? As businesses are downsizing in the recession, they are laying off a lot of people. What type of unemployment will then occur?
Which characteristic would best be associated with pure competition and is a reason why economists suggest pure competition makes society better off?
Refferring to the 10-yer historical period 1990 to 2000,discuss an example of a change in autonomous spending. Research a government policy implemented during that time and discuss the multiplier effect it had on the economy. Make sure your work is c..
Consider a production cooperative wish just two farmers. Each farmers chooses independently how much labor to supply to the cooperative. Each unit of labor is supplied at an opportunity cost of w. output is produced by means of a standard production ..
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