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Suppose that an investment tax credit is stated to be temporary in nature, and the credit will be 10% on newly acquired capital (investment) equipment and will last just one year only.
a. What would you predict to be the effect of this tax credit in the long-run (say, 5 or 6 years)?
b. What would you predict to be the effect of this tax credit in the current year and the following year?
c. How would your answers to parts (a) and (b) differ if the tax credit were permanent?
Limitations of the theory of rational expectations: Critics of this theory note that if policy makers have more information about the economy or their own actions than d
Over long spans of time, macroeconomies typically grow, but over short spans there are fluctuations in output and prices known as ____ ?
Money is generally considered to have three economic functions: A medium of exchange. This is its most significant role. Without money we would live in a barter economy wher
a) Summarize the basic tenets of the arguments in this case. b) Do you agree with main tenets of the arguments in the case? Why? Justify your answer with detailed explanations. s
The Budget Line: The Consumer Constraints The consumer would like to maximize his satisfaction by reaching the highest possible indifference curve. But in the process, he faces
Gas Guzzler Motors is one of three major auto producers. It is currently producing 6,000 cars a day, and selling them at a price of $10,000 each. Its marketing department tells it
The exante real interest rate is based on _____ inflation, while the ex post real interest rate is based on _____ inflation. A) expected; actual B) core; actual C) actual;
The questions posed are broad and open ended so be careful to allow yourself enough research and planning time. If you are completely on top of the material delivered in class, the
Effects of consumption function.
There are very examples of perfect competition. Yet in the study of industrial organization, significant discussion is focused on this type of market. Explain why.
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