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Suppose the government were to provide a $4-per-hour subsidy for families with an employed mother who purchases child care. Using a budget constraint and indifference curve framework, show how this policy might impact the decision of a mother who is not currently employed (be sure to have the number of hours worked before and after the change clearly indicated). In another graph, show how this policy would impact the hours supply decision of a mother of a preschooler who is already working.
You decide to open an individual retirement account (IRA) at your local bank that pays 11%/year/year. At the end of each of the next 40 years, you will deposit $4,000 per year into the account (40 total deposits). 3 years after the last deposit, you ..
Does it matter if a central bank (Fed in US) is independent of the government? Why do you think that matters? What would happen (or likely to happen) if Fed was not independent of the US government? Can you think of any country that their central ban..
Jack and Mike harvest timber and sell it to local sawmills. Harvesting timber requires a special government permit. Jack and Mike have the only two permits and are therefore the only two producers of timber in this market. Harvested timber is a homog..
Banks in New Transylvania have a desired reserve ratio of 10 percent of deposits and no excess reserves. Households want to keep 25% of their money as currency. Now suppose that the Central Bank increases the monetary base by $1,000 billion. How much..
A perfectly competitive business maximizes profit by producing at a rate where ________.
The multiplier effect comes together with crowding effect. A recession results in decrease of welfare program. A recession results in decrease of tax revenue. The unemployment and inflation are in inverse relation. The unemployment and inflation rela..
Assume that Garvin Enterprises', Corp. coupon bond currently sells for $5,800. Bond has a 5 year maturity, an annual coupon payment of $261, and a future value of $5,800. What is the promised yield to maturity on Garvin Enterprises' bond?
Why is it in the U.S we do not consume all of our current output instead of sacrificing some present consumption for investments?
Consider the following model: C=20+0.5(Y-T) I=20-10r T=0 G=50 QUESTIONS: a) Obtain the equation of the IS curve. What is the slope of the curve? Calculate output if r=0.1 b) Suppose now that autonomous consumption increases to 30. What happens to the..
q. for all qualitative non-numerical graphs be sure to label all curves and axes carefully. explain how both initial
K.T. Labs bought a Gene gun for $25,000. The accounting department has estimated that the machine would have an annualized capital cost of $3,880 over its 10-year service life. What salvage value was assumed in calculating the capital cost? The firm'..
Giving a brief explanation, determine the likely effect of each of the following on the value of GM stock.(Consider each event independent of the others.) a. The Federal Reserve lowers both the "discount" rate and the Federal Fund rate.
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