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By given scenario answer the following questions.
1. What phase of the business cycle is the economy?
2. If inflation increased by 5% during the same period, what was the change in nominal GDP?
Compare Classical economic theory to Keynesian economic theory. Which approach, if either is the US currently applying and what have been the effects of such policies?
multiplier static and dynamic
The consumer's utility function is u(x1,x2) = (x1) (x2)^2 (a) Graph his budget constraint for p1 = 3, p2 = 2 and M = 900, and write down the equation for his budget line. (b)
Explain the chain reactions (primary and secondary effects) and show graphs of the following variables: (i) taxes increases, (ii) government spending increases and (iii)repo ra
A bakery has fixed costs of $10 per day and variable costs of $1 per loaf. Its oven can handle up to 50 loaves a day and it is impossible to obtain additional capacity. Sketch the
Assume a competitive industry with two hospitals. The hospitals compete in price (such that P = MC ), face the inverse demand curve =10 - Q , and have a constant marginal cost of
Let us now see a bit more closely how monetary policy works. See Figure Figure The initial equilibrium at point E is on the initial LM schedule that corresponds to a
Suppose you have $10,000 and wish to purchase an annuity that pays you a fixed dollar amount every month. How much would you receive each month if the annuity rate is 1% and you in
THE MULTIPLIER ANALYSIS Multiplier analysis explains what happens to circular flow of economic life when the behavior of one of the sectors or the components of aggregate dema
Explain which of the two strategies is most likely to lead to development. Empirically, it seems rather evident that export-orientation has been more successful than import-sub
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