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In the long-run framework, budget surpluses: A. should be run on a permanent basis since they boost saving and investment and stimulate economic growth. B. should be run whenever output dips below potential output. C. should never be run since they crowd out investment in the short run. D. are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment.
Let us now see a bit more closely how monetary policy works. See Figure Figure The initial equilibrium at point E is on the initial LM schedule that corresponds to a
Using an aggregate demand and supply diagram, explain how each of the following scenarios affects the equilibrium price level and aggregate output. Consider first the short-run, th
Explain the trade-off between equity and efficiency. Identify how individuals and organizations are likely to change their behavior as a result of government actions.
what is meant by diminishing scale output
In general, economists have found that as nations' levels of per capita real Gross Domestic Product (GDP) increase, A. the rate of population growth declines. B. the rate of
State about the Other interest rates There are many other interest rates in a society. For example, you will earn interest when you deposit money in a bank account and you will
What are the requirements for something to be considered money? Why does the dollar have value?
Suppose the price level in year 2009 is 100 and $100 buys 100 notebooks that year. If the price level rises to 125 in year 2010, what is the new value or purchasing power of the do
Question 1: Critically analyse the costs of inflation. Which of these items is likely to have encouraged many governments in their adoption of inflation as public enemy number
graph the central equation of the solow model. argue that a steady state exists and that the economy will converge to this point from any initial starting capital stock
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