How the effect of budget deficit on the real interest rate

Assignment Help Business Economics

Reference no: EM13893335

1. Illustrate and explain how a government budget deficit can lead to a higher real interest rate. Discuss how the effect of a budget deficit on the real interest rate could be altered by an increase in private savings.

2. Assume a Cobb-Douglas aggregate production function in which the capital’s and labour’s shares of income are 0.3 and 0.7, respectively.

a) What would be the effect (on output) of increasing the capital stock by 10 percent?

b) What would be the effect (on output) of increasing the pool of labour by 10 percent?

c) If the increase in labour is due entirely to population growth what would be the effect on per capita output?

d) If the increase in labour is due, instead, to an influx of women (with no increase in population) into the workplace what would be the effect on per capita output?

Reference no: EM13893335

Questions Cloud

Advantages of succession planning for all level of managemet : What are the differences advantages of succession planning for all levels of management, instead of just top management? What problems might an organization encounter in doing an AAP that it might not encounter in regular staffing planning

Own money to the firm instead of investing the money : During a year of operation, a firm collects $175,000 in revenue and spends $80,000 on raw materials, labor expense, utilities, and rent. The owners of the firm have provided $500,000 of their own money to the firm instead of investing the money and e..

Why are mobile systems important : 1) Why are mobile systems important? 2) Describe a DBMS and its functions. List, at minimum, three of the popular DBMS products and give a brief description of each.

What countries are involved in the trade dispute : What countries are involved in the trade dispute? What product (s) are involved and Describe the trade dispute. Who filed the case? What were the circumstances

How the effect of budget deficit on the real interest rate : Illustrate and explain how a government budget deficit can lead to a higher real interest rate. Discuss how the effect of a budget deficit on the real interest rate could be altered by an increase in private savings.

Write a program that reads an unspecified number of numbers : Write and run a program that reads an unspecified number of numbers and then prints them together with their deviations from their mean.

Obtaining a service or providing information : Write a reflection of no less than 700 words of an experience obtaining a service or providing information to a state or local government entity using information technology.

Explain conceptual famework : Explain conceptual famework and how it applies to a human service administration

The demand function for firms product : The demand function for a firm’s product is Q = P^(-3). The firm’s marginal cost of production is constant at MC(Q) = 12. Calculate the elasticity of demand, as a function of Q. Does the firm’s profit maximization problem satisfy the global SOC?

User Account

All Pages