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1. What is the mechanism by which an increase in government spending or a tax cut stimulates the economy?
A) Government purchases of goods and services increase aggregate demand, boosting equilibrium output.
B) Individuals and families who receive tax cuts increase their expenditures.
C) These policies create demand for goods and thereby expand employment and output.
D) All of the above
2. Government borrowing can “crowd out” private investment by…
A) increasing aggregate demand.
B) increasing the interest rate for loanable funds.
C) reducing the quantity of loanable funds available for private investment.
D) Both b. and c.
One of the main differences between how Political Economists view discrimiantion compared to Neoclassical economists is that. Neloclassical Economists believe that discrimination can be persistent and sustained, while the Political Economist believe ..
Calculate the price elasticity of demand using the point formula for Px = 20 and Py = 10. Determine whether demand is elastic, inelastic, or unit elastic with respect to its own price and whether Good Y is a substitute or a complement with respect..
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In comparison to a floating exchange rate, the effect on the volume of trade in a fixed exchange rate is:
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In the economic order quantity (EOQ) model, if the holding cost and the ordering cost both double, the value of Q* will:
An analysis of US incarceration statistics compared against other countries, particularly the percentage of the population undergoing incarceration or some other form of correctional supervision.
Given the basic Keynesian model-as a starting point: Y = C + I + G C = a + b Yd I = f (i) I ? f (Y) ie., MPI* = 0 G = Go Tx = Txo * MPI to represent marginal propensity of invest (NOT import) Assume S = -5 + .25Y, then a $10 billion increase in gover..
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