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Given: C = 500 + .6Yd I = 200 + .3Y - 2000i G = 300 T = 200
(M/P)d = 4Y -12000i M/P = 3000
Show your solution:
a. Derive the IS relation or equation.
b. Derive the LM relation or equation.
c. Solve for the equilibrium interest rate.
d. Solve for the equilibrium output.
(M/P)d = 4Y -12000i M/P = 3000
Show your solution:
a. Derive the IS relation or equation.
b. Derive the LM relation or equation.
c. Solve for the equilibrium interest rate.
d. Solve for the equilibrium output.
Sid is the CEO of a local power plant operating in monopoly market structure.
a. Explain why the demand curve (P) here is larger than the MR, and why Sid won’t
produce on the inelastic portion of demand curve.
b. Draw a graph comparing Sid’s market structure with a market in perfect competition
(on the same graph). Be sure to label the components of deadweight loss.
c. On a separate graph, show the case where the monopoly is making a positive profit
and label the profit area.
a. Explain why the demand curve (P) here is larger than the MR, and why Sid won’t
produce on the inelastic portion of demand curve.
b. Draw a graph comparing Sid’s market structure with a market in perfect competition
(on the same graph). Be sure to label the components of deadweight loss.
c. On a separate graph, show the case where the monopoly is making a positive profit
and label the profit area.
Which one of the following statements is/are correct?
a) When the price elasticity of demand is relatively elastic, taxes levied should be low.
b) Price inelastic goods generate more tax revenue in comparison to price elastic goods provided the tax rate is the same.
c) It is more efficient to levy low tax rates on a broad tax base than high tax rates on a narrow base.
d) The size of the excess burden depends on whether the taxed good is a necessity or luxury.
a) When the price elasticity of demand is relatively elastic, taxes levied should be low.
b) Price inelastic goods generate more tax revenue in comparison to price elastic goods provided the tax rate is the same.
c) It is more efficient to levy low tax rates on a broad tax base than high tax rates on a narrow base.
d) The size of the excess burden depends on whether the taxed good is a necessity or luxury.
Which of the following statements is/are correct?
a) When the average tax rate increases as the tax base increases, the tax rate structure is progressive.
b) Requiring students to pay university fees, is an application of the ability-to-pay principle
c) When luxury goods are taxable by law, we can easily determine if the tax is fair or not..
a) When the average tax rate increases as the tax base increases, the tax rate structure is progressive.
b) Requiring students to pay university fees, is an application of the ability-to-pay principle
c) When luxury goods are taxable by law, we can easily determine if the tax is fair or not..
Peter drives a new BMW and pays R20 toll at the Robme toll road plaza. Lizzy drives a battered VW Beetle and also pays R20. Peter earns R50000 a month and Lizzy earns R20000 a month. Which of the following statements is/are correct? The toll fee is
a) unfair according to the horizontal ability-to-pay principle
b) progressive with respect to the unit of taxation (i.e number of cars)
c) fair in terms of the benefit principle of taxation
d) proportional with respect to the monetary value of the tax base.
a) unfair according to the horizontal ability-to-pay principle
b) progressive with respect to the unit of taxation (i.e number of cars)
c) fair in terms of the benefit principle of taxation
d) proportional with respect to the monetary value of the tax base.
The United States economy has a GDP of $15 trillion, investment is $2 trillion, government purchases $3 trillion, and net exports is -$1 trillion. What part of the expenditure method of calculating GDP is missing? What dollar amount of GDP is the missing category?
Which of the following statements is/are correct?
a) If the average income of voters is less than the income of the median voter, taxes would be relatively high.
b) The growth in the share of government can be attributed to an inflation-linked increase in public expenditures.
c)Peacock and Wiseman's displacement effect implies that after a national crises expenditure levels will not return to their pre-crises levels.
d) Micro models focus on the decision-making behavior of public individuals and institutions.
a) If the average income of voters is less than the income of the median voter, taxes would be relatively high.
b) The growth in the share of government can be attributed to an inflation-linked increase in public expenditures.
c)Peacock and Wiseman's displacement effect implies that after a national crises expenditure levels will not return to their pre-crises levels.
d) Micro models focus on the decision-making behavior of public individuals and institutions.
Which of the following statements is/are correct?
a) From 1960 to 2012 the nominal resource use by the general government in South Africa shows a rising trend although there are periods of decline.
b) It is important to distinguish between the empirical issue of expenditure growth and the reasons for it, and the normative question of what the appropriate size of government should be.
c) We have to distinguish between explanations of changes in the annual growth of government expenditure and the growing trend in the share of government in the economy.
a) From 1960 to 2012 the nominal resource use by the general government in South Africa shows a rising trend although there are periods of decline.
b) It is important to distinguish between the empirical issue of expenditure growth and the reasons for it, and the normative question of what the appropriate size of government should be.
c) We have to distinguish between explanations of changes in the annual growth of government expenditure and the growing trend in the share of government in the economy.
Which of the following statements is/are correct?
a) Peacock and Wiseman agrees with Wagner that a country undergoing industrialisation will experience an expansion in administrative and protection services.
b) According to Wagner demand for certain public goods and services would increase as individuals become more affluent.
c) Wagner's law explains public expenditure growth in South Africa adequately.
d) Micro models focus on the decision-making behavior of public individuals and institutions.
a) Peacock and Wiseman agrees with Wagner that a country undergoing industrialisation will experience an expansion in administrative and protection services.
b) According to Wagner demand for certain public goods and services would increase as individuals become more affluent.
c) Wagner's law explains public expenditure growth in South Africa adequately.
d) Micro models focus on the decision-making behavior of public individuals and institutions.
To promote GDP growth, governments should invest in...
a) the economic infrastructure
b) human capital
c) research and development (R&D)
d) all of the above options are correct
a) the economic infrastructure
b) human capital
c) research and development (R&D)
d) all of the above options are correct
