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Using the same simple macro model we developed in Module 2:
a. Show what will happen to national income (GDP) if the administration implements another $100 (billion) stimulus spending package.
b. Show what would happen if instead of a government spending package, the administration implemented a $100 tax cut.
c. From your results, find the numerical values of the derivatives dY/dG and dY/dT. (Hint: Numerically, dY is just the new value of Y less the old value and dG is the new value of government spending less the old one. Find the ratios of those numbers and you have found the value of the derivative.) Which policy has the largest effect and why?
Real Rigidities The New Keynesian economists rely both on nominal and real rigidities to arrive at their conclusion that nominal changes in money supply have real, and not
Ingrid and Jeff would like to use Saturday night together but have dissimilar tastes in entertainment. Jeff would like to go to the opera but Ingrid would prefer to see soccer. As
types of capital budgeting
the benefits of exchange in the light of the law of association, the introduction of money in direct exchange and way income gets distributed among market participants
Q. Construction of an explanatory model? Construction of a sample: To apply multiple regression a large sample is generally essential (ideally between 2,000 to 15,000 indivi
(Only for extra credit) Consider Freddy on a rainy Thursday afternoon after losing in his favorite video game. His friend Tommy comes over to cheer him up and offers him the follow
Goverment Banker, Fiscal Agent and Adviser Central banks in all countries acts as the fiscal agent, banker and adviser on all important financial matters to government of thei
A profit-maximizing firm faces the following options for hiring workers: a) Assume the firm has limited space so that it can only hire one worker. Which type of employee sh
#queCase Study Labor standards Geeta & Company has experienced increased production costs. The primary area of concern identified by management is direct labor. The company is co
You own a pharmaceutical company that is specialized in the manufacture of medicine for smokers. You newly patented an innovative drug called Clealung, which drastically reduces th
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