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Consider a market where supply and demand are given by QXS = -18 + PX and QXd = 90 - 2PX. Suppose the government imposes a price floor of $41, and agrees to purchase any and all units consumers do not buy at the floor price of $41 per unit.
a. Determine the cost to the government of buying firms' unsold units.
b. Compute the lost social welfare (deadweight loss) that stems from the $41 price floor.
Explain the term- inventory investment We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciat
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y explain whether you agree or disagree with the following statements. “If nominal GDP is less than real GDP, then the price level must have fallen during the year.”
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