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lorasvet [3.4K]
3 years ago
5

Bummerland finds itself in a recession caused, as assumed in class, a sticky nominal (money) wage (W) which is too high to clear

the labor market.
Bummerland has a Treasury and a "Federal Reserve" (called the Bummerb¬ank). At a meeting of officials of both agen¬cies, various antirecess¬ionary policies are considered. The economic staffs of both agencies are seriously split on issues such as how interest sensitive investment is and how interest sensitive the demand for money is. However, they are in agreement that the marginal propensity to consume (b) is .75 and the marginal propensity to hold cash (k) is .2. Bummerland has banks, but the reserve requirement is 100%, so they don't create money.
Debate has narrowed to four prospective policies. Your as¬signment is: (1) illustrate these policies using IS,LM diagrams; (2) compare as completely as possible ( if you can't, you must explain what additional information would be required ) the effects of these policies on Y*, r, I*, the real wage, and unemployment. Class format is strongly encour¬aged.
Here are the four policies: (1) a $50 billion increase in the money supply by means of open market opera¬tions; (2) a $50 billion increase in the money supply to be introduced by reducing tax collections; (3) a $50 billion increase in the money supply to be introduced through government spending; (4) a $50 billion increase in unemployment benefits paid for with a tax increase.
Business
1 answer:
puteri [66]3 years ago
8 0

Answer:

is this a book if so send me a link

Explanation:

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3 0
3 years ago
Does everyone have an inner voice that is not subject to control ?<br> A. True <br> B. False
Blababa [14]
False is the correct answer.
6 0
3 years ago
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Laura budgets $54 each month for annual expenses. She nets $1820 semimonthly.What percent of her net monthly income does she bud
Basile [38]

Answer:

14.83%

Explanation:

Laura budgets $54 each month for annual expenses. She nets $1820 semimonthly.What percent of her net monthly income does she budget for annual expenses?

$1820 semimonthly = 1820 x 2 monthly = $3,640

Annual expenses budget  = $54

Percentage of her net monthly income budgeted for annual expenses = (54 / 3, 640) x 100 = 14.83%

6 0
3 years ago
Epsilon Co. can produce a unit of product for the following costs: Direct material $ 8.80 Direct labor 24.80 Overhead 44.00 Tota
sergeinik [125]

Answer:

Make since the relevant cost to make it is $62.20.

Explanation:

There is an option below the question ask for details

The computation of the total product cost is shown below:

= Direct material per unit + Direct labor per unit + Overhead cost per unit

where,

Overhead cost per unit would be

= Overhead cost per unit × remaining percentage

= $44 × 65%

= $28.6

All the other items values would remain the same

Now put these values to the above formula  

So, the value would equal to

= $8.80 + $24.80 + $28.6

= $62.20

Since the given total product cost is more than the computed one so the company will choose make option and for decision making we take only 65% which is relevant

4 0
2 years ago
Price controls in Venezuela resulted in a thriving black market in many goods. The black market arose because the price controls
bekas [8.4K]

Answer:

price ceilings; shortage

Explanation:

Price control is defined as government imposed prices to regulate the way forms make profit in the market. Take for example if a product is in high demand and firms can raise prices very high to make profit. To protect the consumer the government will set a price ceiling to limit price increase.

In Venezuela when price ceilings were implemented the sellers will create artificial shortage which forces the consumer to buy at higher prices in a black market arrangement.

5 0
3 years ago
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