This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Which of the following will occur when the capital stock falls? A) profit per unit of capital ... (Read 73 times)

MirandaLo

  • Hero Member
  • *****
  • Posts: 538
on: Jun 30, 2018
Which of the following will occur when the capital stock falls?
 
  A) profit per unit of capital will increase
  B) profit per unit of capital will decrease
  C) there will be no change in profit per unit of capital
  D) there will be an ambiguous effect on profit per unit of capital
  E) none of the above

Question 2

Use the IS-LM model to answer this question. Suppose there is a simultaneous increase in taxes and reduction in the money supply. Explain what effect this particular policy mix will have on output and the interest rate. Based on your analysis, do we know with certainty what effect this policy mix will have on investment? Explain.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

chereeb

  • Sr. Member
  • ****
  • Posts: 326
Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

In this case, the LM curve shifts up and the IS curve shifts to the left. In this case, output will clearly fall. What happens to the interest rate depends on the relative magnitude of the two policies. The effects on I are again ambiguous.


MirandaLo

  • Member
  • Posts: 538
Reply 2 on: Jun 30, 2018
Excellent

scottmt

  • Member
  • Posts: 322
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

According to the National Institute of Environmental Health Sciences, lung disease is the third leading killer in the United States, responsible for one in seven deaths. It is the leading cause of death among infants under the age of one year.

Did you know?

Studies show that systolic blood pressure can be significantly lowered by taking statins. In fact, the higher the patient's baseline blood pressure, the greater the effect of statins on his or her blood pressure.

Did you know?

The strongest synthetic topical retinoid drug available, tazarotene, is used to treat sun-damaged skin, acne, and psoriasis.

Did you know?

For pediatric patients, intravenous fluids are the most commonly cited products involved in medication errors that are reported to the USP.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

The following terms describe types of body movement that occur at the diarthrotic joints The following terms describe types of body movement that occur at the diarthrotic joints
A Motor Unit A Motor Unit
J. M. W. Turner, The Upper Falls of the Reichenbach. J. M. W. Turner, The Upper Falls of the Reichenbach.
The profit, p(t), made at a fair depends on the price of the ticket, t. The profit is modelled ... The profit, p(t), made at a fair depends on the price of the ticket, t. The profit is modelled ...
ADHD (Stock photo) ADHD (Stock photo)
Orientation and structure of a nephron, the functional unit of the kidney. Orientation and structure of a nephron, the functional unit of the kidney.
Video: HIV Infection: Viral life cycle

For a complete list of videos, visit our video library