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2. You are examining the effects of a specific tax of 10 cents imposed on the sales of a product that we shall call XYZ. To carry out your analysis, assume that the market is a per
using the basic Keynesian model answewr the following parts carefully using the relevant diagrams. what happens to the equilibrium level of GDP(Y) given the following: a) a reducti
What is the theory of Second Best? Prove the theorem with the help of a diagram.
equilibrium price and output.
illustrate and explain the changing demand for big mac using the indifference curve and budget line
The price of petrol fell during the past year. a. Explain why the law of demand applies to petrol just as it does to all other goods and services. b. Explain how the substitu
Slope of an Iso-quant: Since along an iso-quant the level of output remains the same, if θL units of θL are substituted for K units of K, the increase in output due to θ L
A government is currently operating with an annual budget deficit of $40 billion. The government has determined that: • Every $10 billion reduction in the amount of bonds it issue
The Effects of Advertising on the Demand Curve: Advertising targets to: • Change the slope of the demand curve which means make it more inelastic. This is done by generat
Government Budget Deficits Governments have been traditionally spending more what they could earn by way of taxes and sale of economic goods and services produced by them. The
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