hpqscan0013 - Mirna”[U"THE Quffi’fipw wiTH’...

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Unformatted text preview: Mirna”: [U "THE Quffi’fipw; wiTH’ DiAQR-AMS MORETPW CDNC ANQLQEFA abuts BE s mfg.” 40 ’i REC _ 90. We can expect the firm in Diagram 3 to be exposed to all but one of the below. Which is incorrect? 3. Entry of other firms into the industry it is in. b. Factor impuation. c. dec easing quasi-rents. d. creasing pure profit. .fafiankru'ptcy because of changes 'a to d. Page If, Sheet 6 91. The firm represented in diagram 4 is in: - 2'25 full Marshaliian long run equilibrium. h. the market period. .the secular period. qi‘the short run. “(5. Cannot pay factors their VMPs. 92. The firm represented in Diagram-£9 ‘1; ' ' has-enough receipts to: a. pay all of its factors except capital. 13. only cover its fixed costs. c. but not enough to be able to pay stockholders anything as it has .. /' no profit. ’ d." at both the intensive and extensive margin. is will be exposed to lots of entry and demands for increased factor returns due to its pure profits. 93. Assume a simple Keynesian model. ' Consider a consumption function: C2200 + .SGNP. If there is an increase in spending on Investment [Gross Capital Formation] then the multiplier is: a. .5 (3):; a ,c. 5 d. 200/{1-b]. e. None of the above. 94. Assume the simple Keynesian model. -In the next three multiple choice I want you to work out the Trygve Haavelmo theorem for yourself The consumption function' 15 C=100 + “SGNP There' IS a balanced budget. Government now spends an additional 100. Assume the government spending multiplier 13 l/[l— b}. The effect on the economy is: n a. )— 500. o.’+ 400. c. Zero. d. Indetermiante. e. 100 + [.8x100] = 280. 95. Same situation as 94. The government now taxes by 100. The government tax multiplier is -b {i - b]. , The effect on the economy from taxes is a. zero. After all the budget 15 balanced. ,1; iii—3'- 400. c. Indeterminate. d. -500. e. -[200 + 3x100} = -280. 96. Considering the effect of government Spending in 93 and the effect of government taxing in 94 we can conclude an increase in government spending that is fully financed and which keeps the budget balanced has a multiplier effect of: a. Zero. b. infinity. guOr/ie. "d! An indeterminate amount. e. Ten. 97. Suppose the Consumption Function :5 C — 100 + .8 GNP. Government spends 100. .Capital investment is 100. Experts are 100. Full employment GNP' is 2,500. What will the government have to spend- according to Keynes- to reach full employment? , _ ;- 3‘4 it)“. _ V, : .1]: 2w. ./ Egon f {H} .i .7“; ii" iii 3;“: , l 1‘ {-1 - i )Ii‘fi (““- Cl. 400. r" i ' e, 500. g, =._ l ...
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