macro economics policy
(a) Do you think that macroeconomic policy should be designed to achieve a measured unemployment rate of zero? Why or why not should this be the case?
Fiscal policy measures used for achieving full-employment level of output and price include increase in the government expenditure and cut in tax rates. A cut in tax rates eliminates only the adverse effect of high tax rates, whereas an increase in government expendit
Define Break Even point? Elucidate with the help of saving function. Answer: Breakeven point is a point where consumption equals to income and saving is equivalent t
Elucidate the concept of deflationary gap. Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium
Net revenue for Macho Man fake mustaches increases after the price raised from $5 to $7, pointing that demand faced by Macho Man was: (i) Relatively elastic. (ii) Relatively inelastic. (iii) Unitarily elastic. (iv) Perfectly inelastic. (v) Perfectly e
Describe the following terms: (i) Business fixed investment (ii) Inventory Investment (iii) Residential construction Investment (iv) Public Investment.
Whenever longer periods are considered and hence bigger ranges of adjustments (that is, substitutions) become probable, demand curves tend to become: (i) Flatter, and therefore do supply curves. (ii) Flatter, as supply curves become steeper. (iii) Ste
Definition of shortage: It is a condition in which quantity demanded is more than the quantity supplied. The sellers will respond to the shortage by increasing the price of the good till the market reaches the equi
The consumer gains from being capable to purchase at a single price rather than paying all that the particular quantity of the good is subjectively worth are: (i) Adverse selections. (ii) Market exploitation. (iii) Consumer surpluses. (iv) Moral hazards.
Question: What can we learn from the Japanese experience? Is the US headed for a 'lost decade? Answer: There was a similari
Tax revenue: Tax revenue is the revenue which occurs on account of taxes levied by government. Taxes are of two kinds: direct taxes and indirect taxes. Direct taxes are such taxes levied instantly on the property and income of person’s income ta
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