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Understanding the tools of fiscal policy.
Assume that the economy is already in a recession, and both the President and Congress have decided to do something to restore the economy. Both agree that lowering taxes would not be a good idea, but do believe that it is in the best interest of the economy to increase government spending in defense, education & infrastructure.
The President and Congress change the budget accordingly, but after 18 months, GDP only increased by three quarters of the expected amount. What factors might be responsible for this situation?
State the tools of fiscal policy and how they are used to reduce inflation or eliminate a recession.
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.
You are trying to decide whether to buy some laptop computers for your business in either Canada or in United States. Looking at identical machines on the Dell Canada and the Dell US web sites, you find that they sell for US $2000 (US dollars) in ..
According to the neo-classical economic theory, the market is a natural, self-regulating system that tends automatically towards the full employment equilibrium of supply and demand.
You're the manager of a paper mill and have been subpoenaed to appear before a joint session of the Senate Consumer Affairs and the Senate Environmental subcommittees.
For each of the following events, state whether the aggregate demand curve would increase, decrease, or stay the same.
Which of the following is the result of competing through advertising for a monopolistically competitive firm? Which of the following is true about advertising?
For each of the following pairs of goods, would you expect the cross-elasticity of demand to be positive or negative? Large (in absolute value) or small? Defend your answers:
Given the price elasticity of demand for two products & marginal cost, determine the optimal markups and prices under third-degree price discrimination.
Compute the short-run profit maximizing level of labor and capital demand. Compute the long-run profit maximizing level of labor and capital demand.
What is the profit-maximizing price for this firm? On the graph show the area, which area represents the net loss to society resulting from the monopoly power conferred by the patent?
Discuss, relating in part whether such highways are public goods and whether or not privatization should work.
Assume the airline industry consisted of only 2 firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 40q. Suppose the demand curve for industry is given by P = 100 - Q and that each firm expects the other to ..
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