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Suppose the following equations (in billions of dollars) explain a hypothetical economy where both price level and interest rates are fixed.
C=110 + 0.75(YD)YD= Y - NTNT = 0.2YI = 175G = 80EX = 70IM = 30 + 0.1Y
*NOTE: NT means net taxes. YD means disposable income.
i) What is the equilibrium level of income (real GDP) in this economy?
ii) Calculate the autonomous expenditure multiplier for this economy
iii) Graph the aggregate expenditure function to show autonomous aggregate expenditure, the slope of the aggregate expenditure function and equilibrium income
iv) What changes in government spending would be necessary to move the present equilibrium GDP (calculated for part (i) above) to the full employment level of 1000
v) What changes in transfer payments would be necessary to move the economy towards full employment GDP of 1000.
Breifly explain the effect of an increase in money supply.
Compute the trucks net book value at the end of its third year of use under each depreciation method.
The year is 2007, and the price elasticity of driving on Dulles Toll Road is 1.6. The owners of Dulles Toll Road raise the cost of a one way trip to $8.50.
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The number of repairs manufactured by a computer repair shop depends on the number of employees as given follows:
One might expect company in monopolistically competitive market to experience greater swings in price of their products over the business cycle than those in an oligopoly market.
Describe their organizational structure and what market entry strategies each of these companies are currently using.
The Federal Reserve Bank controls money supply and interest rates in the US. How good, or bad, a job has it done over the past 2-years?
Suppose that there is an "inflation scare," that is, suppose market participants increase their expectations of future inflation.
Movie theaters generally charge the same ticket price for all movies with evening show times, regardless of popularity. This pricing strategy causes surpluses for unpopular films & shortages for popular films.
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