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The spending multiplier measures the effect of a change in government spending on the overall output of an economy, all other things being equal. If an increase of $10 billion in government spending produces an $11 billion increase in overall output, then the spending multiplier is
Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8-0.4q. Marginal extraction cost = $2. r = 20%. The available supply is 20 units. Calculate the allocation of outputs across the two periods that maximizes the present valu..
Using lists (bullets and numbers) in documents
In a one shot game, if you advertise and your rival advertise, you can each earn $5 million in profits. If either of you advertises, you rival will make$4 million and you will make $2 million. Identify and dominant strategy your rival has?What is the..
The current spot rate between the UK and the U.S. is £0.6528 per $1. The expected inflation rate in the U.S. is 1.8 percent. The expected inflation rate in the UK is 3.4 percent. If relative purchasing power parity exists, what will the exchange rate..
How would Keynesian solve a recessionary gap using personal tax rates.
Elucidate how does that fact that many goods are non traded affect the extent of possible gains from trade.
Describe the problem of “adverse selection” when health insurance is offered at a community rated premium? Define the term “community rated premium” as well. Is it possible to address the problem of adverse selection by increasing the premium level? ..
On a graph of supply and demand, which of the following is represented by the height of demand curve when it intersects the price axis?
What determines whether or not a resource is scarce? Why is the concept of scarcity important to the definition of economics? Discuss the impact of rational self-interest on each of the following decisions. Suppose you go to a restaurant and buy an e..
A sinking fund is established by Alliance, Inc., at 8% interest compounded semiannually to meet a financial obligation of $1,800,000 in 4 years. What periodic sinking fund payment is required every 6-months to reach the company's goal?
If the entry barrier is removed consumers will be better off because consumers will enjoy greater consumer surplus. Explain.
1. For each of the following economic conditions, place an X in the table to indicate theappropriate range in the Aggregate Supply Curve
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