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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?
show on the market for cheese that impact of what happened in the milk market.
Index number formulas
it has been argued that economic development of developing countries has been held back by a persistent fall in the terms of trade of developing countries over the long run
DIFFICULTIES IN MEASURING THE NATIONAL INCOME There are some conceptual and statistical problems in measuring national product. Some items are excluded from the national incom
solutions to central problems of economy.
what is real and norminal interest rates?
The amount of wealth that households and business desire to hold in the form of money balances is called the 'demand for money'. Individuals and firms have at their command only
Examine the efficiency of quanttitative credit control instrument
Suppose the consumption function is C = $500 billion + 0.55Y and the government wants to stimulate the economy. By how much will aggregate demand at current prices shift initially
what are the qualitative methods of controling credit
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