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Assume that money demand is highly insensitive to the interest rate. Explain what the effects are on interest and income of an increase in government expenditure (G). Which component(s) of aggregate demand are crowded out (i.e., reduced)? Use an IS-LM diagram to support your answer.
Consider the Ricardian model. Home has 1200 unites of labor available. It can produce two goods, apples (A) and bananas (B). The unit labor requirement in apple production is 3, while in banana production it is 2. Construct the world relative supply ..
In a perfectly competitive factor market, a firm faces a(n):
A country that attempts to keep its exchange rate fixed will have a “devaluation” of its currency (or exchange rate) if persistent balance of payments deficits cause it to amass dangerous amounts of foreign exchange reserves. Would you please explain..
What would peso/dollar exchange rate be if purchasing power parity holds. If a monetary expansion caused all prices in Mexico to double.
New classical economists believe that it is possible under certain circumstances for an increase in the money supply to lead to a decrease in real GDP in the short run.
In the most recent economic downturn, what types of polices were actually implemented (fiscal, monastery, or both?) to stimulate the economy? Provide examples of the policies and tell if it was a success, and why?
A boat is purchased by financing $40000. The loan is to be paid over a 5 year period with annual payments based on a 12% interest rate. Each successive payment is scheduled to be 10% greater than the previous one. Determine the size of the smallest p..
The U.S. government pays an economist at the U.S. Department of Commerce $50,000 in salary in 2006. The economist then retires. In 2007, the government pays him $30,000 in retirement benefits. The 2006 payment is included in 2006 GDP as government pu..
How does this change the value generated by the market? Why do you say this? Where does this appear in your graph.
Latin America has a wealth of regional trade agreements. Look into Chile’s recent agreement with China and analyze their likely effects on exports and imports. What products are most likely to be involved in expanded Chilean–Chinese trade?
Critically evaluate measures used by governments and central banks to manage the economies of their countries.
illustrate what proportion of the population would score higher than Bob.
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