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An economy has the following consumption function:
C = 200 + 0.8DI
The government budget is balanced, with government purchases and taxes both fixed at $1,000. Net exports are $100. Investment is $600. Find equilibrium GDP. What is the multiplier for this economy? If G rises by $100, what happens to Y?
What happens to Y if both G and T rise by $100 at the same time?
Explain whether there is a relationship between inflation and unemployment and should government interfere and reduce inflation and unemployment?
Consider a company in a perfectly competitive market. The company has just built a plant that costs $15,000. Each unit of output requires $5 worth of materials.
List the four assumptions for the Monopolistic competition model. Now explain how the market will adjust in the long run and draw a corresponding graph for the representative firm in the long run. (Explain your answer.)
Describe the economy's stage in the business cycle and evaluate current macroeconomic conditions.
An economy consists of three workers: Larry, Moe, and curly. Each works ten hours a day and can produce two services: mowing lawns and washing cars. In an hour, Larry can either mow one lawn or wash one car; Moe can either mow one lawn or wash two..
Michael Illitch bought the Detroit Tigers in 1992 for $82 million, which amounted to $114.15 million in 2005 dollars. by 2005, the Tigers were worth $292 million. Calculate the real compound annual rate of return on that investment.
The New York Times reports that Wal-Mart has decided to challenge Netflix and enter the online DVD by mail market. Because of economies of scale, Wal-Mart has a slight cost advantage relative to Netflix. Wal-Mart is considering the use of a limite..
What specific kinds of research, testing, or surveying might you have performed if you were the decision maker in a similar situation in the future What, if anything, would you do differently about the assumptions being made.
the government has recent completed a study suggesting that fora health diet every consumer like chrissy a cash subsidy that would induce her to buy F=8. how large would the cash subsidy need to be? show her optimal basket iwth the cas subside on ..
Determine how can federal government spending crowd out private sector investment and consumption and does the exent of crowding out depend on whether or not government spending is financed by taxes.
Dani Rodrik argues that democratically elected governments, not international finance, should be the ultimate source of discipline for national economies. Others say that democracy itself is the problem.
Describe the uncontroversial final effect of a contractionary monetary policy and an expansionary fiscal policy.
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