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You are an assistant to a senator who chairs an ad hoe committee on reforming taxes o telecommunication services. Based on your research, AT&T has spent over $15 million on related paperwork and compliance costs, Moreover, depending on the locale, telecom taxes can amount to as much as 25 percent of a consumer's phone bill. These high tax rates on telecom services have become quite controversial, due to the fact that the regulation of the telecom industry has led to a highly competitive market. Your best estimates indicate that based on current tax rates, the monthly market demand for telecommunication services is given by Qd=250 -5P and the market supplying (including taxes) is Qs=4P-110(both in millions) where P is the monthly price of telecommunication services. The senator is considering tax reform that would dramatically cut tax rates, leading to a supply function reform that would dramatically cut tax rates, leading, to a supply function under the new tax policy of Q^s= 4.171P -110. How much money would a typical consumer save each month as a result of the proposed legislation?
Explain how do the principles of microeconomics which you have leaned in this course apply to other nations.
Discuss how the economic crisis of 2008 impacted the findings in the 2009 Crime Report. Given the significant increase in mortgage fraud, discuss ways this can be deterred in the future.What financial areas do you will think will emerge with signif..
Elucidate the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier.
Consider cartel pricing, the price leadership model, and the kinked demand curve model. Which of these three models predicts price stability in oligopoly and which predict price instability, that is, unpredictable ups and downs in the level of pri..
In order for you to be indifferent between the after tax returns on a corporate bond paying 8.5 percent and a tax-exempt municipal bond paying 6.12 percent,
Describe the industry equilibrium price/output combination both graphically and algebraically. Calculate the level of excess supply (unemployment) if the minimum wage is set at $7 per hour.
Illustrate what happens if the government is trying to stimulate the economy with their spending, but this leads to a greater output than projected.
Explain how the central bank in a modern economy operates; in particular, how it tries to control the monetary base (H), and thus the quantity of money (M) via open-market operations.
Discuss the effect of each of the following on the quantity demanded or the demand for new motor homes.
Suppose that any money lent by a bank is always deposited in a checkable deposit and that the reserve ratio is 10%. The Fed purchases $100 million in Treasury bills.
What condition holds when the firm is maximizing profits? Explain in words what the math of the answer means. (b) What conditions do the functions R(Q) and C(Q) have to satisfy for you to know that the quantity Q* that satisfies the condition in (..
Show the changes to the T-accounts for the Federal Reserve and for commercial banks when the Federal Reserve buys $50 million in U.S. Treasury bills.
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