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Consider an economy in which autonomous consumption is 800, the marginal propensity to consume is 0.8, investment is 400, government spending is 500, taxation is 400, and net exports are 100.
A. What is the equilibrium GDP in this economy? Show your work.
B. What is the savings at this level of GDP? Show your work.
C. What are the spending and tax multipliers? Show your work.
D. If government spending increases by 200, what is the new equilibrium GDP and what is the increase over the original equilibrium GDP? Show your work.
E. If the government increases both spending and taxation by 200, what is the new equilibrium GDP and what is the increase over the original equilibrium GDP? Show your work.
What accounts for the geographic dispersion of the Federal Reserve district banks? Shouldn’t the president be allowed to appoint a new Fed chairman at the start of his administration?
An airline is considering the purchase of an Airbus A-320neo which offers improved fuel efficiency over the previous generation of narrow-body aircraft. The finance department estimates the aircraft will generate a positive net cash flow of $6 millio..
The opportunity cost of a new public highway is the:
Explicate why the PPF before the war is different from the PPF after the war. Explain how you appraise the role of modern government.
what effect would this change have on the wages in the two markets you illustrated in part (a)? what effect would the change have on the average wages of men and women?
The demand function for a firm’s product is Q(P) = 50!P/10. The firm’s cost of production is-For this part only, change the demand function by assuming that demand (at any given price) is half of what it was before. In this new situation, calculate t..
Suppose a firm purchases labor in a competitive domestic labor market and sells its product in a competitive international product market that covers the whole world. Domestic producers represent a small portion of the world market and have no influe..
Suppose that survey measures of consumer confidence indicate a wave of pessimism is sweeping the country.
In class, we study the two-part tariff question with the following system. Consumer 1 has demand function q1 = 50 − p1 and consumer 2 has q2 = 50 − 2p2 The per-unit cost of the production is mc = 10. What’s the necessary conditions that consumer 1 wi..
Illustrate the significance of resource pricing explain rule or criteria of employing for resources under pure and perfect competition.
A reputable study finds that a new workplace safety regulation will reduce the rate of economic growth of real GDP. Is this an argument against implementing the new reform? Why or why not?
With increased access to wireless technology and lighter weight, the demand for laptop computers has increased substantially. Laptops have also become easier and cheaper to produce as new technology has come online. Despite the shift of demand, pr..
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