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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.
effects of tax increase on the gross domestic product
Consider the following: The city council has just approved the construction of a water park in your town. You are responsible for studying the impact of the new water park on the l
Explain what convex indifference curves means in terms of marginal utility. What properties must a utility function have in order to obtain convex indifference curves?
At first, it may seem obvious that consumption will rely on Y. If GDP is doubled in real terms over a number of years, government consumption, private consumption and investment wi
Aggregate Demand Policies Both fiscal and monetary policy changes shift the AD curve. Let us see how, starting with a fiscal expansion. See figure 6.2. In the upper panel, the
An antenna shown in Figure is to be adjusted from its current position to a new desired position by turning a potentiometer at an angle θ i (t) . The potentiometer converts the an
When Sonoma Vineyards reduces the price of its Cabernet Sauvignon from $15 a bottle to $12 a bottle, the result is an increase in a. the demand for this wine b. the supply of
Q. Overnight interest rates targets and money supply? There are many ways to explain the significant connection between overnight interest rate target and money supply. We will
The city of Cabernet is very famous for its production of wine. The inhabitants of the city have an aggregate demand for wine that can be described as follows: D(p) = Q d =150-
What is the difference between accounting profit and economic profit? Accounting Profit: The accounting profit of a business is the revenue of business minus the explicit
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