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Assume that government purchases decrease by $10 billion, with other factors held constant, including the price level. Calculate the change in the level of real GDP demanded for each of the following values of the MPC. Then, calculate the change if the government, instead of reducing its purchases, increased autonomous net taxes by $10 billion. a. 0.9 b. 0.8 c. 0.75 d. 0.6.
Why might a perfectly competitive market firm be willing to run at a loss in the short run? The assumptions of a PCM firm should be outlined in order to end that the PCM firm i
using a graph of the classical labour market, illustrate the effects of a real wage existing in the market that is lower than the equilibruim real wage.what will eventually happen
How unemployement increases by firm relocating production If unemployment increases in a specific city because of a firm relocating production, it's structural unemployment tha
law of indefference curve
Based on the recent success of Ontario tennis star Milos Raonic, Nike Canadawill produce new state of the art tennis racket with a red maple leaf on the strings. Mike expects to se
Why is it important for policymakers to consider both the direct and indirect effects of public policies?
Using the equilibrium in the labor market and the model IS-LM explain the different behavior described by the classic and keynessian schools when there is an increase in public spe
The benefits of capitalism are that the governments have limited control over other business, which lets business compete.
BOP on Capital Account: BOP on Capital Account shows only export and import of capital and the difference between the two represents a country's capital account balance. C
Inflation (RPI) - another imperative channel. Oil is a necessity for the UK, and is price inelastic therefore one can analyse the correlation between a price shock and inflation. I
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