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(1) The federal government is considering selling tracts of federally owned land to private developers and using the revenues to provide aid to victims of an earthquake in a foreign country. How would this policy affect the levels of federal revenues, expenditures, and deficits under a cash accounting system? What would be different under a capital accounting system?
(2) A government is considering paving a highway with a newly developed "wear-proof" material. Paving the highway would cost $2 billion today, but it would save $300 million in maintenance costs for each of the next 10 years. Use the concept of present value in maintenance costs for each of the next 10 years. Use the concept of present value to determine whether the project is worth undertaking if the government can borrow at an interest rate of 5 %. Is it worth it if the interest rate is 0 %? 10 % ? A politician says to you, " I don't care what the interest rate is. The project is clearly a good investment: it more than pays for itself in only 7 years, and all the rest is money in the bank." What's wrong with this argument and why does the interest rate matter?
(3) Suppose that demand for a product is Q-1200- 4P and supply is Q= -200 +2P? Furthermore, suppose that the marginal external damage of this product is $8 per unit. How many more units of this product will the free market produce than is socially optimal? Calculate the deadweight loss associated with the externality.
what id the definition of public debt burden?
Suppose there is certain social norm. Its enactment into statutory law lowers people's private cost of its enforcement because it creates the possibility that violation of norm wi
what is public debt. ? give complate information on public debt. ?
The term Public Economics came into existence only in 1960s however a few titleswith nomenclature such as Public Finance had already started covering much ground,which is today cov
Types of Policies for Reducing Pollution
The structural interdependence, in fact, forms the basis for the policy maker's choice behaviour for policy or policy mixes. The spectrum formed by various policy mixes depends on
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Explain the following: (Critically Depensated) Growth Function Sustainable Yield Functions Logistic Growth Function
Consider two different consumer-directed health plans. One has a $5000 deductible, with the insurance paying for all care after the deductible has been met. The other has a $2000 d
why-this-behavior-consistent-with-size-maximizing-government
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