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(Effects of Fiscal Policy) Recently some legislators have called for tax increases to reduce the federal budget deficit. Conservatives have countered that such tax increases could plunge the economy into a recession. Using aggregate supply and aggregate demand, explain how increases in taxes would lead to a loss of output and a dampening of prices. Are there arguments on both sides?
Suppose that in the United States a car can be produced with 200 labor hours, while a ton of rice requires 20 labor hours. In Japan, it takes 150 labor hours to make a car and 50 l
ACCOUNTING SYSTEM-EXAMPLE III Now suppose the Jam Co. manufactures some herbal chemicals and flavors which it sells partly to Extracts Co., partly to Bottling Co., some are co
the classical model assumes that consumption depends positively on disposable income. now suppose that consumption also depends on the real interest rate. a) sketch the loanable
what are the purposes of taxation
Explain the multiplier effect with example Deposits and loans in banks give rise to an important multiplier effect. We use a simple example to illustrate this effect. Consider
Debate between New Classical and New Keynesian economics?
Suppose that a particular large hotel has 790 rooms. Furthermore, suppose that the demand for the hotel's rooms are normally distributed with a mean demand of 733 rooms with a stan
While referring to the "EYE on YOUR LIFE" section on, discuss the macroeconomic policy issues facing the U.S. economy today based on the economic concepts you have learned in this
What is Consumer Price Index CPI is a price index of a specific basket known as the CPI-basket. CPI-basket contains essentially all the service and goods consumed in a country
One unit of A is made up of one unit of B and one unit of C. B is made of three units of D and one unit if F. C is composed of three units of B, one unit of D, and four units of E.
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