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1) The multiplier. Assume the MPC is 3/4.
a) What is the value of the multiplier?
b) Assume investment spending increases by 10 billion AED. Calculate the first through the five rounds of spending in the economy. Why is the effect reduced in each round?
c) Calculate the total change in GDP arising from this increase in investment. Comment
d) How much must government spending increase in order to increase GDP with 10 B?
Trading Up The cost of protecting jobs in uncompetitive sectors through tariffs is high: Saving a job in the sugar industry costs American consumers $826,000.
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Two factories together have marginal abatement cost equal to MACT = 750 - 6eT, where e1 + e2 = eT. The undesirable pollutant imposes a cost on the residents of society and this is given by the marginal damage cost MD= 4eT.
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Suppose equilibrium GDP is less than full-employment output and the economy is in a recession. What are the appropriate fiscal policies that would take the economy to full employment level?
Given your chosen organization, what concepts, tools, and readings from the MBA Program Capstone Bibliography are most relevant to helping guide how you might recommend improving the company? How and why are they relevant?
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