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Suppose you have the following information about a closed economy: C = 50 + 0.80 (Y-T) I = 200 G = 100 a) Find out the equilibrium level of income. b) Suppose G in
Wholesale Prices, Consumer Prices and Inflation From the man on the street to the highest policy makers, the behavior of prices is of intimate concern. Prices determine the pu
A. What are the major differences between capitalism, communism, and socialism? B. Discuss the three major economic indicators and how they are indicative of our current economi
An example of direct foreign investment is given by: a. The sale of U.S. government bonds to foreigners. b. The sale of U.S. stocks (equities) to foreigners. c. A multinational cor
A new industry develops, and our government wants to protect it from foreign competition. Which one of the following arguments would appropriately describe this type of protection?
Economic Growth Cyclic Fluctuations At this stage, it is useful for us to understand the difference between economic growth and cyclical fluctuations. Economic Growth Econo
A seafood restaurant in a beach resort town has a fixed (unavoidable) cost of $1,000 per month and variable (avoidable) costs of another $1,000 per month. Its total revenues over t
As is the case with the supply and demand function for a single business firm determining the equilibrium price and output for its product, the aggregate supply and aggregate deman
Can a nation's economy grow larger over time? How?
Equilibrium Income The next step is to use the aggregate demand function, AD, to determine the equilibrium level of income and output. This is done in figure . Recall that the
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