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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.
Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event its
Using the Mundell-Fleming model, describe how an increase in a country’s risk premium on the world interest rate can result in a higher level of real income. Under what circumstanc
#types of economic systems
(1) Based on the article, describe as best you can: (i) the reference group for the cost benefit analysis, (ii) the purpose of the study (i.e., what is the "project" in this
Flossy has a quasi-linear utility function, 16q1^0.5 + q2. The price of good 1 is fixed at one. Thus, Flossy's budget constraint is q1 + p2q2 =Y, where Y denotes income. 6.1 Compu
What is the marginal product? The marginal product of an input is the extra quantity of output which is generated by using one more unit of which input. Marginal product of
In principle, outsourcing makes things a little inexpensive and enhance profitability. Though, some things require to be done 'in house'. For example, some employers (largely) outs
ISSUES RELATED TO BALANCE OF PAYMENTS: It is to be remembered that the Indian economy witnessed varying intensities of BOP problem during 1956-9 1. However over the 1990s,
what is the importance of credit multiplier
Q. Explain about Price Inflation? The major reason for allowing for non-constant wages in the model is that we then can allow for persistent deflation/inflation. With constant
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