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- In the history of the economy, there has been an understanding that the government does not need to intervene directly in economic activities. The economy is only based on market equilibrium (classical/micro economics). This understanding gave rise to the Great Depression. A. Retell the series of events of the great depression until an understanding emerges that there must be direct government involvement in economic activities! B. Give an analysis, what was the main cause of the great depression, even though at that time there was a very significant increase in production?Indicate whether the items below (A) increase economic growth, (B) decrease economic growth, or (C) does not directly affect economic growth or cannot be determined. 1. Lower interest rates on loans 2. Policy support on financial literacy and new financial services 3. Shift of selected industries from oligopolistic to perfect competition 4. Issuance of treasury bonds 5. Lower income tax ANSWERS ONLY7 The graph below depicts an economy where an increase in aggregate demand has caused inflation. Assume the government decides to conduct fiscal policy by changing taxes to bring inflation under control. Fiscal Policy 160 LRAS 150 AS 140 130 120 110 100 90 AD, 80 70 60 AD 50 40 80 160 240 320 400 480 560 640 720 800 Real GDP (billions of dollars) 7 of 14 Next > Mc Graw Hill < Prev Match Diacritics Whole Words Highlight All Match Case Tyne here to search Price Level
- Frost and drought in Brazil, bad weather in Colombia, as well as COVID-19-related lockdowns in Vietnam are constraining coffee supply chains. Analysts expect demand for coffee to rebound in the US and Europe as covid restrictions lift. But imagine instead that US and European consumers' tastes have changed, and they prefer to consume less caffeine. What can be predicted about the coffee market? Coffee prices will increase, and coffee consumption will definitely decrease. Coffee prices are uncertain, but consumption will definitely decrease. Coffee prices will decrease, but coffee consumption is uncertain. Coffee prices will definitely increase, but that is all we can know for certain.Indicate whether each view follows the traditional (neoclassical) view of money, banking, and capitalist economies, or the (post)Keynesian view. The level of investment depends most significantly on the - interest rate Money developed through rational, private actors in an - attempt to economize on transaction costs Money precedes production 1. Traditional (neoclassical) Loans create the money necessary to invest, and therefore to produce and generate an income to deposit into banks. (loans create deposits) 2. (Post) Keynesian The level of investment depends most significantly on - expectations ('animal spirits') Deposits into banks create the funds that get loaned out. - (deposits create loans) Production precedes moneyThere are some 4.5 billion people in the base of the pyramid as customers, diverse suppliers and strategic distribution and retail partners. These people live primarily in Asia, Africa and South America. The BOP is defined as those people that earn less than $ 8 per day. They are value demanding consumers, resilient and creative entrepreneurs, producers, business partners and innovators. Because they are largely excluded from formal markets, there is a strong demand for innovative products, services and technologies that provide access to basic needs. *** Consultant 1 argues that businesspersons should turn their attention to the poorest of the 4 billion people in developing markets, the core of the base of the pyramid, who are slowly but steadily becoming part of the market economy. While per capita income is small, she believes the potential size of this market is huge and represents the next frontier of globalization. She notes that firms focused on developed markets may need to…
- 36- Mr. Ahmed is running a small grocery shop in Manah. During this pandemic, the sale of goods has gone down because of less demand. After 12 months of bad market conditions, the Business started slowly improving from March 2021. Identify the economic cycle he is facing at present. a. Thorough b. Peak c. Recovery d. RecessionPhillips-Van Heusen owns or licenses 19 of America’s most successful apparel and footwear brands. Its multiple brands, multiple channels, and multiple price point strategies are designed to provide stability should market trends such as the economy or consumer taste shift. In other words, if a recessionary period occurs, the company can sell its Arrow and private-label brands in discount stores. In the event of a prosperous economic time, the company can benefit from the sale of its Calvin Klein and Kenneth Cole brands in specialty stores. In either economic scenario, the company can remain profitable using the: A. principles of administrative management B. human relations approach to management C. principles of bureaucratic management D. systems approach to management E. contingency approach to managementCompare and contrast the use of government spending changes versus tax changes as a means of influencing the course of the economy. Is one or the other preferable in specific situations? A class is debating on two opposing viewpoints: 1- The best way to manage the economy is through tax changes. 2- Its' better to adjust the economy through government spending. What would a Neoclassical economist say? What would a Keynesian economist say? Which viewpoint do you agree with, and why? PART II: In this course we discussed several real complications that make monetary and fiscal policy more challenging than simple theory would suggest. Given Lebanon economic state and the causes of that state. What should be the appropriate mix of fiscal and monetary policy?
- Please Both CPI and Core CPI moved in the same direction for the US economy in 2020 and 2021. Agree/Disagree? Provide a brief explanation.(24) Assume that the AD curve intersects the AS curve in the Neoclassical Region and that the government increases government spending. What happens to the level of GDP? Group of answer choices (A) It goes down. (B) It stays the same. (C) It goes up.) Explain the differences among the following three types of yovernment intervention in the health insurance market: (1) public subsidy, (2) mandated insurance benefits, and (3) direct public provision of insurance coverage. If the goal of government intervention is to achieve universal coverage, which strategy is the best (most efficient) in terms of minimizing the deadweight loss?