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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?
how realistic is the sales maximization model from experience with business objectives as pursued by Zimbabwean firms
Q. Illustrate Internal Economies of Scale? Internal economies of scale are the benefits of large scale production. They are enjoyed by the firm when it increases its scale of p
Costs of Economic Growth (Increase in National Income) 1. People living in industrial towns suffer from the effects of a polluted atmosphere. 2. The manufacture of
a. Explain why the demand for a particular brand is more elastic than the demand for all cigarettes. If Lucky Strike raised its price by 1% in 1918, was the price elast
BU 5210 Final Summer 2013 Economic Analysis
SEARCH THEORIES - A BRIEF' HISTORICAL OVERVIEW A search theory of unemployment is found even in the writings of A. C. Pigou in the inter-war period. To explain the high
A medical insurance company offers its salespeople the following compensation scheme: each worker takes a fixed salary and, in addition to that, a commission depending on the volu
A toy manufacturer makes output according to the production function: where n is the number of workers employed by the firm, O is a technological parameter and g the worker
WHY MANAGERS NEED TO KNOW ECONOMICS The influence of economics towards the performance of managerial duties and responsibilities is of major importance. The importance and cont
Marginal Revenue (MR) This is the increase in Total Revenue resulting from the sale of an extra unit of output. Thus, if TR n-1 is Total Revenue from the sale of (n-1) units
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