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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?
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
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Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2
Substitution Effect on law of demand When price of a commodity falls it becomes comparatively cheaper if price of all other related goods, particularly of substitutes, remain c
Suppose that the present level of income in the economy is $700 billion. It is determined that in order to decrease the unemployment rate to the desired level, it will be essential
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Types of isoquant
Airbus Boeing Demand P = 182.868 - 0.0003Q P = 198.6592 - 0.00013Q TVC Curve TVC = 104.8822Q - 0.001Q^2 + 0
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