Macroeconomics, Student Value Edition (7th Edition)
Macroeconomics, Student Value Edition (7th Edition)
7th Edition
ISBN: 9780134739038
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 1, Problem 1.2.11PA
To determine

The choice between productive efficiency and allocative efficiency in a centrally planned economy.

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Respond to Luis Rodriguez  I recommend Mrs. Ibrahim's proposal to lower interest rates as the more effective approach for fostering economic growth in Sudan. Sustainable Growth - Lowering interest rates encourages investment in productive capacity, which can lead to long-term economic growth rather than a temporary boost from cash transfers. Job Creation - This approach can create more stable employment opportunities by promoting business expansion through lower borrowing costs. Addressing Structural Issues - Lower interest rates can help address underlying structural issues in the economy, such as low production levels, by incentivizing businesses to invest in technology and infrastructure. Inflation Control - While there is a risk of inflation if appropriately managed, focusing on productive investments can help mitigate this risk compared to the potential inflationary effects of direct cash transfers. In conclusion, while both proposals have merit, Mrs. Ibrahim's approach of…
Consider the competitive market for rhodium. Assume that no matter how many firms operate in the industry, every firm is identical and faces the same marginal cost (MC), average total cost (ATC), and average variable cost (AVC) curves plotted in the following graph. 100 90 80 70 COSTS (Dollars per pound) 8 50 40 ຊ 20 10, 10 10 + MC ATC AVC Π 0 0 5 10 15 20 25 30 35 40 45 50 QUANTITY (Thousands of pounds) (?)
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