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Suppose that total factor productivity, z, affects the productivity of government production just as it affects private production. That is, suppose that when the government collects taxes, it acquires goods that are then turned into government- produced goods according to G = zT so that z units of government goods are produced for each unit of tax collected.
With the government setting G, an increase in z implies that smaller quantity of taxes are required to finance the given quantity of government purchases G. Under these circumstances, using a diagram determine the effects of an increase in z on output, consumption, employment, and the real wage, treating G as given (i.e. G does not change, only the amount of T changes) Explain your results.
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Businesses often decide between using automation and labor in production. An automotive environment may have high fixed costs and low variable costs.
Current economic theory and their application or lack of application to contemporary economic problems
Demand and supply situations in perfectly competitive market for unskilled labor are as follows, Estimate the industry equilibrium price or output combination both graphically and algebraically.
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Graphically show how the short run Phillips curve can shift when actual inflation is less than expected inflation be sure to include a description of all the key points in the model.
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