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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
Q. Describe Keynesian cross model? Keynesian cross model is a simple version of what we call the 'complete Keynesian model' or simply the Keynesian model. Keynesian model has a
Consider a model of Cournot competition as studied in class, with 2 firms and a linear inverse demand function P(Q) = a - Q (where Q = q 1 + q 2 is the total quantity produced by
Kermit is considering purchasing a new computer system. The purchase price is $106,430. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compo
"Nearly all critics agree that consumers have the most benefits in a perfectly competitive market." Does the above statement apply to microeconomics or macroeconomics? Why? Think a
dynamic multipier
Q. Describe Exports and imports in AS-AD model? Exports and imports. This is more difficult to justify owing to exchange rate. Suppose that we have a flexible exchange rate a
Economics Please Help! Assume that two power plants, Firm 1 and Firm 2, release sulfur dioxide (SO2) in a small urban community that exceeds the emissions standard. To meet the sta
You are the manager of a firm that receives revenues of $50,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -3,
Types of Taxes Which a Government can impose on the citizens are as follows: With the theory of taxation covered, we can now move towards the actual menu of the taxes the gover
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