Exploring Microeconomics (MindTap Course List)
7th Edition
ISBN: 9781285859453
Author: Robert L. Sexton
Publisher: Cengage Learning
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Chapter 11, Problem 18P
To determine
To fill:
The value for the rests of the cost functions.
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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…
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Exploring Microeconomics (MindTap Course List)
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