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Suppose there is a $200 billion recessionary gap. If there are no taxes or imports to restore the economy back to potential GDP how much should government expenditure be changed if the marginal propensity to consume is 0.75? Does government expenditure need to be increased or decreased?
Why is popcorn so expensive at the movies? Argue both that a high price for popcorn is price discrimination and then argue that it is not price discrimination.
Devise a hypothetical business situation in which buying a look back.
Be able to examine critically the health of the economy as a whole through the analysis of major economic variables and advise on likely policy alternatives
Expalin why is the depreciation of capital good a cost of society
Utilizing the standard IS/LM model, elucidate how the scope of monetary policy to change real economic activity in the short run depends on the private sector reaction to interest rate changes.
Be sure to clearly indicate what happens in the market for loanable funds, to net capital outflow, and in the market for currency exchange.
Using your answers above, why does the growth rate of real GDP differ depending on the base year? Explain how the technique of Chain-Weighted Real GDP alleviates this problem.
The cost of expanding trade credit using the approximation formula is less than the cost of the bank loan. However, the true cost of the trade credit when compounding is considered is greater than the cost of the bank loan.
At what price of food in terms of manufactures would A and B respectively supply food? Would trade take place between A and B in David Ricardo’s world? How many manufactures could B supply?
Discuss why demand curve faced by a Perfect Competitor is assumed to be perfectly elastic and that of a Monopolist less elastic.
Illustrate what is meant by the term "natural monopoly" and what are the key characteristics.
q.assume which the economy is in a long-run equilibrium.a- draw a diagram to illustrate the state of the economy .be
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