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1. Consider two projects. The first project pays benefits of $90 today and nothing else. The second project pays nothing today, nothing one year from now, but $100 two years from now. Which project would be preferred if the discount rate were 0%? What if the rate increased to 10%? 2. Suppose that the original before-tax demand curve is P = 98-2Qd and that supply is P = 2+2Qs. Now suppose a $3 unit tax is imposed on consumers.a. Use supply and demand diagrams to show the effect of a $3-unit tax imposed on the demand side. b. What is the before-tax equilibrium price and quantity?c. What is the after-tax equilibrium quantity?d. Calculate the economic incidence incurred by producers and the economic incidence incurred by consumers.e. How much tax revenue is raised?
Explain about the nominal Gross domestic product It isn't very common to use CPI in construction of real GDP. The reason is that CPI measures the price evolution of consumer go
A budget deficit is defined as: A. accumulated surpluses minus accumulated deficits. B. a shortfall of revenues compared to expenditures. C. accumulated deficits minus accumulated
long run supply curve
What is the relationship between deposit multipier,Credit Multiplier and Deposit multiplier?
Give a brief description of the transmission mechanism 1. When the central bank target rate increases, other interest rates in the economy will increase (and the money supply
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Suppose that between January 2011 and January 2012 the total number of people employed and the unemployment rate both fell. Briefly explain how this is possible. [2 marks]
difference between mercantilism and absolute advantage
A negative outflow to the U.S. balance of payments is generated by the purchase of United States assets (such as United States Treasury bonds) by foreign investors and the sale of
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