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Between 2007 and 2009 the U.S. economy experienced a severe recession. In an effort to stimulate the economy, the federal government passed a stimulus package. Explain the federal government's use of fiscal policy (the stimulus) to promote growth and employment. Support your ideas with concepts found in the assigned reading. Include the following in your response: • Discuss some actions taken by the federal government and whether the recession would have been longer and the unemployment rate higher if the government had not acted by passing the stimulus package? • If left alone, do you believe the economy would have corrected itself as suggested by Classical economic theory? Explain. • Discuss the effect these policies had on increasing the size of the budget deficits and the national debt.
Long-Run Labor Demand: Graph an increase in the wage when only labor is a 'normal' input to production. Graph an increase in the wage when both inputs are 'normal'
Q. Consumption function in the AS-AD model? Consumption. Suppose that P increases by say 10% whereas real GDP (Y) is constant. Nominal GDP and nominal national will now have
unplandned change in inventory are coutned as investment spending by firms
How can franchises ensure their products are appropriate for international markets?
Suppose three identical firms are engaged in Cournot competition in quantities. They all have marginal costs equal to 40. Market demand is given by: P(X) = 200 - X = 200 - (x
The Price ceiling is the law that sets a maximum price below the equilibrium market price, but a price floor is the law that sets a maximum price above the market equilibrium price
1. Consider a natural monopoly. I. Show graphically and discuss how price and quantity are set by the natural monopolist. II. Define the areas corresponding to the consumers'
Differences between absolute advantage and comparative advantage? Ans) Absolute benefit and comparative benefit are two basic concepts to international trade. Under
Incentives Incentives designed to increase effort, reward enterprise and encourage saving and investment include: an emphasis on the effect of a reduction in the margi
Q. Aggregate demand in the IS-LM model? Aggregate demand Aggregate demand depends on Y and R in the IS-LM model As investments depend on R
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