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Suppose that the production function takes the form Y = AKa*L1-a, where a?= 1/3. Assume that the saving rate, s = 0.15 and the rate of depreciation d = 0.05 Further, let A = 1, and L = 2, initially.
A cash manager purchases $1 million in commercial paper with one month remaining until maturity. At maturity, the cash manager will receive the face value of the security. What will he pay for this
The marginal propensity to consume and the marginal income tax rate are 0.9 and 1/3, respectively. The budget deficit is observed to increase by 90. a. What change in investment would account for th
The marginal propensity to consume is 0.80. The income tax is equal to one-fourth of income. If the government decides to increase spending in order to increase output by Php 900
Government purchases and taxes are Php 600 and Php 400, respectively in millions. Investment equals Php 500 million. The autonomous part of consumption is Php 800 million. With marginal propensity t
If the current level of output is 800 million, the marginal propensity to consume is 0.8 and taxes are unrelated to income, what is the new equilibrium level of income if investment increases by 15
A sample of 48 warehouses that are for sale across the U.S. is taken, and the mean price per square foot is $31.67, with a sample standard deviation of $1.29. Test the investor's concern at a 5% lev
The chamber of commerce of a Florida Gulf Coast community advertises that area residential property is available at a mean cost of $125,000 or less per lot. Suppose a sample of 32 properties provide
Suppose that the economy starts at equilibrium and the mpc = 0.8. What would be the effect of a $300 increase in taxes once all the rounds of the multiplier process are complete
Suppose in the banking system as a whole, demand deposits are equal to $80,000,000 and reserves are equal to $17,000,000 with a legal reserve ratio of 10%. If the Fed doubles the required ratio, by
Each worker at Gallo's cork factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of corks produce.If Gallo's produces at a rate of 70 corks per hour and opera
Assume the government cuts its purchases by $150 billion. As a result, the budget deficit is reduced by $40 billion, private domestic saving decreases by $10 billion, disposable personal incom
A chief executive of an oil company must decide whether to drill a site and, if so, hew deep. It costs $160,000 to drill the first 3,000 feet, and there is a 0.4 chance of striking oil. If oil is st
If it contracts with a private firm; its profit would be $2 million, $0.7 million, or -$0.5 million with probabilities 0.25, 0.41, and 0.34, respectively. If it contracts with the government, its pr
A large share of the world supply of diamonds comes from Russia and South Africa. Suppose that the marginal cost of mining diamonds is constant at $1,000 per diamond, and the demand for diamonds is d
Recall also that, in equilibrium the real output produced (Y) is equal to aggregate expenditures: Y=C+Ig+Xn B. What happens to equilibrium Y if Ig changes to 10, will the outcome reveal the size of
Advance Analysis Assume that the consumption schedule for a private open economy is such that consumption C=50+0.8 Y. Assume further that planned investment Ig and net exports Xn are independent of
If your nominal income rose by 5.3 percent and the price level rose by 3.8 percent in some year, by what percentage would your real income increase and what would be the change if the nominal income
Suppose that the natural rate of unemployment in a particular year is 5 percent and the actual rate of unemployment is 9 percent. Use Okun's law to determine the size of the GDP gap in percentage-po
Assume the following data for a country: total population 500, population under 16 years of age or institutionalized 120, not in labor force150, unemployed 23, and part-time workers looking for full
where P is the price in dollars per litre, Qd is the quanity demanded in millions of litres per year, and Qs is the quanity supplied in millions of litres per year. what is the price elasticity of d
b. Calculate the aggregate social welfare in the competitive market c. Suppose Christmas tree suppliers get together to form a price-setting cartel (monopoly). What will price and quantity in this m
a.) what is the market-clearing price b.)how much will he produce c.) what is the net profits d.) what is the elasticity of demand at the market-clearing price
For hotdogs, the average fan's MU for units 1, 2, and 3 is 150, 125, and 80 utils. For soda, MU for units 1, 2, and 3 is 130, 100 and 60. For nachos, it's 140, 120 and 100. The average fan spends $2
Home, Sweet Home. Suppose Ms. Profligate and Mr. Discipline both purchase identical $185,000 homes in Marietta, GA on January 1, 2012. They both have good credit and qualify for a loan with no down