If households
If households become more willing to hold less cash and more stocks or bonds, the
Since the percentage of income paid in taxes generally declines as taxpayer income increases, standard sales taxes and “sin” taxes [for example, excise taxes upon liquor or tobacco] are illustrations of: (1) proportional t
What do you mean by the term Equilibrium? Also state its proper definition.
What is the role of price in market economies?
A change in tax rate changes the IS equation, LM equation remaining the same. Let same, let us suppose that the government raises the tax rate from 20 percent to 25 percent<
In poor countries people spend a big percentage of their income so that APC and MPC are high. Yet, the value of multiplier is low. Explain why?
Describe when there will be a surplus of the good?
Explain the concept of “economies of scale” and “increasing returns”.
Imports and American cars are much close however not perfect replacements. When the U.S. govt. tried to enhance American car sales by setting a price ceiling of P1 on imported cars: (i) The quantity of cars imported will drop/fall from Q0 to Q1. (ii)
What relationship does the MPC bear to the size of the multiplier? The MPS? What will the multiplier be when the MPS is 0, .4, .6, and 1
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