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a. Suppose a government moves to reduce a budget deficit. Using the long-run model of the economy developed in Chapter 3, graphically illustrate the impact of reducing a government's budget deficit by reducing government purchases. Be sure to label: i. the axes; ii. the curves; iii. the initial equilibrium values; iv. the direction curves shift; and v. the terminal equilibrium values.
b. State in words what happens to: i. the real interest rate; ii. national saving; iii. investment; iv. consumption; and v. output.
Write an economic paper on the Gender pay gap. How does elasticity apply to the issue? If appropriate, include a calculation for elasticity.
A monopolistic producer supplying raw materials to two industries one with a lower price elasticity of demand and the other with a high price elasticity of demand, practices to prevent its low price elastic consumers (who have more elastic demands..
Contractionary monetary policy is a form of economic policy used to fight inflation which involves decreasing the money supply in order to increase the cost of borrowing which in turn decreases GDP and dampens.
Explain the benefits to vehicle manufacturers of using the market with reference to transaction cost economics.
State with brief reasons whether the following statements are true, false, or uncertain.
The Law of Demand states that the demand for a product is inversely related to the price of such product. Therefore, the demand for a product is considered downward sloping. This implies that quantity demanded increases when price decreases. Is th..
In the case of logarithmic utility, Cobb-Douglas production, and delta=1, what is the equation for kt+1 as a function of kt? Comment on whether you find this surprising.
The paper should address the following questions: How robust has this recovery been? Is there a threat of surging inflation? What are the policy options available for accelerating growth
What has happened to the price of crude oil in 2015? What has happened to the demand for crude oil in 2015? Is there an economic theory that supports this relationship? Support your answer with a diagram.
Assume that the interest parity condition holds and that both the expected exchange rate and foreign interest rate are constant. Given this information, an increase in the domestic interest rate will cause:
Assume x and y are the only two goods a person consumes. If after a rise in p x , the quantity demanded of y decreases, one could say
Explain why a current account deficit indicates that a country is using more goods and services than it is producing.
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