Posted: November 9th, 2015
ECONOMICS
Section A- Discussion Questions (30
According to a local politician,there is no need for government intervention when positive externalities are present because no one is being harmed. Comment about this opinion from an economic point of perspective. Include any relevant diagram in your answer.
In the aggregate demand/aggregate supply framework, what factors will cause aggregate demand to shift and what are the implications for macroeconomic equilibrium? Include any relevant diagram in your answer.
Section B – Short Answer
Questions
Explain the difference and potential interaction between the multiplier and the accelerator. Include any relevant diagram in your answer.
Should gift cards be considered as part of money supply? Explain your reasons based on the features of money.
Section C
Exercise
Suppose you are given the following information about the economy, with the values in billions of dollars:
Total sales
value of production by firms
$150,000
Total expenditure on intermediate products by
firms
$130,000
Consumption
$10 000
Investment
$5,000
Net exports
$-500
What is the GDP in this case?
What is the government expenditure?
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