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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?
1. What kind of market structure is involved for the sale of medicines and vitamins? 2. What can be said about barriers to entry in this market? 3. Might there be a change in mar
Real Rigidities in the Goods Market The most important factor associated with real rigidity in the goods market is the existence of imperfect competition. Imperfect comp
DETERMINANTS OF MONEY SUPPLY The total supply of nominal money in the economy is determined by the joint behaviour of the central bank which controls the total issue of the hig
(Kinky Demand Curve) Short Period Kinked demand curve was first used by Prof. Paul M. Sweezy to elucidate price rigidity under oligopoly. In an oligopoly market, firm knows that
discuss the validity in zimbabwe of the grounds on which the profit maximising model of the firm has been defended
Q. Concept of economies of scale? Economies of scale refers to the cost advantages that a business attains because of expansion. 'Economies of scale' is a long run concept and
Determine the concepts of demand Demand always mentions to demand at price. The term 'demand' has no meaning unless it is related to price. For example, the statement, 'the
Two competing firms are each planning to introduce a new product. Firm 1 will decide whether to produce product A, product B or product C, while firm 2 can choose between products
show how scarcity and opportunity cost are useful in decisionmaking
on the application of any of the concepts learnt in Managerial Economics. You may try to use these concepts to everyday problems in life or in any of the current debates on in the
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