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An economy is operating with an output that is $600 billion dollars above its natural rate of $2400 billion dollars and fiscal policy makers want to close the inflationary gap. The central bank agrees to hold the interest rate constant so there is no crowding out. The marginal propensity to consume is 3/4. In which direction and by how much would the government spending need to change to close the gap? Fully explain your answer and provide a graph that shows the initial situation.
Identify two microeconomics and two macroeconomics principles or concepts from the simulation.
Use a graphical approach to explain the effect of the following changes.
Consider the market for minivans. For each of the events listed here, identify which of the determinants of demand or supply are affected. Also indicate whether demand or supply increases or decreases. Then draw a diagram to show the effect on the..
Discussion: Taylor Rule and Inflation Targeting- Determine impact on the economy if the central bank in the US used inflation targeting. Explain your rationale.
Find the following for this project if the appropriate discount rate is 12%.
Now suppose the same game is played with the exception that Player A moves first and Player B moves second. Draw the game tree associated with this situation. Using the backward induction method discussed in the online class notes, what will be th..
Explain for each event whether it changes short-run aggregate supply, long-run aggregate supply, aggregate demand, or some combination of them.
If the price of a rental car is $60, what is the consumer surplus in each market segment?
Calculate the total money creation in the economy with the help of formula and how the banks create money with the help of given information.
If resources available for human consumption were out of limit, there would be no need for a subject field such as economics. Why do I say this?
The question used this table that demonstrate the value of GDP in the nation of Purintania. The figures demonstrate are in millions of 1980 dollars and current dollars.
In a 1990 article assessing the 1980's, Time reported that: "The good news is that U.S. gross national product doubled during the 1980s, from $2.7 trillion to $5.3 trillion." The GNP number they refer to is nominal GNP. Why might this news not be as ..
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