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Many states provide firms with an investment tax credit that effectively reduces the price of capital. In theory these credits are designed to stimulate new investment and thus create jobs. Critics have argued that if there are strong factor substitution effects, these subsides can reduce employment in the state. Explain their argument
Describe the law of diminishing returns. Then discuss why you agree or disagree with following statements.
Provide an update on the economy-where is unemployment, what is the outlook for the deficit, what are the overall predictions for 2010 - 2012?
Discuss why the same types of problems may exist in government as well, where elected officials are the agents and voters are the principals.
Government needs to eliminate the gap by changing expenditures. What policy would you suggest.
Assume that software purchases by businesses are treated as expenses, as they were before November 1999. Calculate GDP using three different approaches: expenditure approach, income approach, and product approach.
A perfect competitive firm has the cost function TC = 1000 + 2Q + 0.1 Q^2-What is the lowest price at which the firm can break even?
Explain how the aggregate expenditure function shifts in response to the changes in each of the following variables:
Assume the US economy experiences deflation. Trace through the impact on the US macroeconomic variables to the effect on the FOREX rates.
Asume that an individuals inverse demand for wireless services in the greater Atlanta.
Illustrate what percentage of the CEO's total earnings is tied to profits of the firm.
Show the weekly relationship among output also number of workers for a factory with a fixed size of plant.
Why might it be difficult for the Fed to formally adopt inflation targeting? Would inflation targeting be a good policy for the Fed in the present economic environment
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