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Unformatted text preview: subsidy to an industry. 3. A monopolist decides to maximize profits rather than revenue. Using a diagram, explain how price and quantity will change. 4. Explain two policies that a government might use to deal with the problem of demand-deficient (cyclical) unemployment. 5. How would deterioration in the terms of trade affect the current account of a country? 6. With the help of a diagram, explain how a buffer stock scheme is expected to work. & 2 & N04/3/ECONO/HP2/ENG/TZ0/XX 8804-5102...
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This note was uploaded on 02/12/2010 for the course ECON 201 taught by Professor Smith during the Spring '10 term at Whittier.
- Spring '10