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Explain the impacts of an expansionary fiscal policy such as a tax cut on the levels GDP, Consumption, Investment, interest rate and unemployment and price. Explain using separate graphs of C+I+G line and Aggregate Demand-Aggregate Supply curves. In particular explain how your answer depends on the slope of the aggregate supply curve.
Changes in government spending and interest rates
Illustrate each of the following events using a demand and supply diagram for bananas.
What is the level of price, output, and amount of profit for an unregulated monopolist? Analyze the effect of regulation on the allocation of resources. Which situation is most efficient? Which situation is most likely to be chosen by government? ..
There are 10 identical firms that have the common cost function c(y) = y 2 + 9. The industry demand function is given by X (P) = 200/
Describe the law of diminishing returns. Then discuss why you agree or disagree with following statements.
Suppose the CFO of a German corporation with surplus cash flow has 1 million Euros to invest. Suppose that interest rates on 1-year CD deposits in U.S. banks
Between your answers to parts b and c, which prices/capacity are best applied from a social welfare perspective? Why?
Explain what accounts for the Hong Kong Monetary Authority behaving differently than the other central banks in emerging Asia.
Explain the influence that transferable property rights versus non-transferable property rights, has on individual decision making.
Consider economy that is above full-employment equilibrium (natural rate of output) because of an increase in AD. Prices of productive resources have'nt changed. With the help of graph
Determine the profit-maximizing prices both firms will charge. In addition, calculate the price-cost margin for each firm and indicate which has more pricing power and why.
Suppose a risk-averse consumer has an initial wealth of $5,000 and a utility function U(M) √M.. He faces an 80 percent chance of losing $4000, and a 20 percent chance of losing $0.
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