Q: What are the pros and cons of using public funds to prop
What are the pros and cons of using public funds to prop up a financial system in crisis?
See AnswerQ: Consider an economy that produces and consumes hot dogs and hamburgers.
Consider an economy that produces and consumes hot dogs and hamburgers. In the following table are data for two different years. a. Using 2010 as the base year, compute the following statistics for ea...
See AnswerQ: The government raises taxes by $100 billion. If the marginal
The government raises taxes by $100 billion. If the marginal propensity to consume is 0.6, what happens to the following? Do they rise or fall? By what amounts? a. Public saving b. Private saving c. N...
See AnswerQ: Explain what happens to consumption, investment, and the interest rate
Explain what happens to consumption, investment, and the interest rate when the government increases taxes.
See AnswerQ: Give an example of a bank balance sheet with a leverage ratio
Give an example of a bank balance sheet with a leverage ratio of 20. If the value of the bank’s assets rises by 2 percent, what happens to the value of the owners’ equity in this bank? How large a dec...
See AnswerQ: Some economic historians have noted that during the period of the gold
Some economic historians have noted that during the period of the gold standard, gold discoveries were most likely to occur after a long deflation. (The discoveries of 1896 are an example.) Why might...
See AnswerQ: Suppose China exports TVs and uses the yuan as its currency,
Suppose China exports TVs and uses the yuan as its currency, whereas Russia exports vodka and uses the ruble. China has a stable money supply and slow, steady technological progress in TV production,...
See AnswerQ: According to the IS–LM model, what happens in the
According to the IS–LM model, what happens in the short run to the interest rate, income, consumption, and investment under the following circumstances? Be sure your answer includes an appropriate gra...
See AnswerQ: When workers’ wages rise, their decision about how much time to
When workers’ wages rise, their decision about how much time to spend working is affected in two conflicting ways—as you may have learned in courses in microeconomics. The income effect is the impulse...
See AnswerQ: Consider how unemployment would affect the Solow growth model. Suppose that
Consider how unemployment would affect the Solow growth model. Suppose that output is produced according to the production function Y= K a[(1 - u)L]1-a, where K is capital, L is the labor force, and u...
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