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Use the model of aggregate demand and short-run aggregate supply to explain how each of the following would affect real GDP and the price level in the short run.
a. A decrease in government purchases
b. A major improvement in technology
c. A trade surplus
d. An increase in labor cost
-Suggest a monetary policy to adjust the situation in scenario d.
Use the Aggregate Demand and Supply Model and your own research to explain the movements in the Gross Domestic Product over this period.
If the desired fiscal stimulus is $20 billion and the desired AD increase is $50 billion, we can conclude that the MPC is:
Suppose that you are the chief economic advisor to the president of the United States. You are asked to propose a strategy to bring the economy out of recession.
Provide a rationale for the economy starts to recover from a severe recession and more people go back to work, government-funded unemployment compensation payments begin to decline.
Suppose that a firm in a perfectly competitive industry has the following total cost schedule; Compute a marginal cost and an average cost schedule for the firm.
New Light Inc. has just developed a solar panel capable of generating 200% more electricity than any solar panel currently on the marketplace.
Suppose the total money supply equals $1.8 trillion, and the currency to deposit ratio is .2 and the bank reserves plus each in circulation equal $600 billion
What fixed amount of money should the company plan to set aside each year, at 8% interest per year, compounded annually, in order to make the above payments? Ans: $4,427.82.
Why does the payroll tax have the same impact on wages and employment regardless of whether it is imposed on workers or on firms?
Explain why both economic logic and the factual record do NOT support the notion that pay gaps between men and women stem mainly from employer discrimination.
What is more effective monetary or fiscal policy or do they both have their strengths and weaknesses? What is the quickest way for the government to influence economic activity?
The economics student knows that profit maximizing manager will produce quantity where marginal revenue equals marginal cost
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