Inflation: The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation. Budget deficit: The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

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Answer 1

Question

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.

Explanation of Solution

The inflation of the economy can be controlled if the taxes are raised or if the government spending can be cut down.

The problem of budget deficit can be controlled only if the government borrows from outside sources.

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Students have asked these similar questions

Please answer questions D-H, I have already answered A , B,C but it may help you to still solve them yourself. Thank you!

2. A firm’s production function is given by:Q = 10KLThe unit capital and labour costs are 2 and 1 pounds respectively. The firm is contracted to produce2000 units.(a) Write out the optimisation problem of the firm. (b) Express this problem using a Lagrangian function. (c) Find values of K and L which fulfil the contract with minimal cost to the firm. (d) Calculate the total cost to the firm.

3. Consider the following estimated regression equation, estimated using a sample of firms, where RDis total firm spending on research and development in USD ($), Revenue is total firm revenuein USD ($), and W ages is the firms’ total spending on wages in USD ($) (standard errors inparentheses):RDd = 1000(600)+ 0.5(0.1)Revenue + 1.5(0.5)W ages,(a) Interpret the coefficients on each of the explanatory variables. (b) Which of the three coefficients are statistically significant at the 5% level of significance? Howdo you know? A researcher runs a two-sided statistical test of the null hypothesis that both the coefficients onthe explanatory variables above are jointly equal to 0.25 (mathematically, that β1 = β2 = 0.25),and reports a p-value of 0.045.(c) What does this p-value mean for the outcome of the test? (d) What would an appropriate two-sided alternative hypothesis look like?

Answer 2

Question

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.

Explanation of Solution

The inflation of the economy can be controlled if the taxes are raised or if the government spending can be cut down.

The problem of budget deficit can be controlled only if the government borrows from outside sources.

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Answer 3

Question

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.

Explanation of Solution

The inflation of the economy can be controlled if the taxes are raised or if the government spending can be cut down.

The problem of budget deficit can be controlled only if the government borrows from outside sources.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.

Explanation of Solution

The inflation of the economy can be controlled if the taxes are raised or if the government spending can be cut down.

The problem of budget deficit can be controlled only if the government borrows from outside sources.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.

Explanation of Solution

The inflation of the economy can be controlled if the taxes are raised or if the government spending can be cut down.

The problem of budget deficit can be controlled only if the government borrows from outside sources.

Answer 6

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.

Explanation of Solution

The inflation of the economy can be controlled if the taxes are raised or if the government spending can be cut down.

The problem of budget deficit can be controlled only if the government borrows from outside sources.

Answer 7

Chapter 16, Problem 1QFT

To determine

Inflation:

The situation in the economy when the supply of money exceeds its demand and there is a hike in the price of all the goods and services, this situation is called as inflation.

Budget deficit:

The situation when the spending or expenditure of the government is more than its revenue, it’s known as a deficit budget for the government.

Answer 8

Expert Solution & Answer

Answer to Problem 1QFT

In the given case, there exists a problem of budget deficit as well as the problem of inflation and the government of Argentina was unable to control either of these problems.

The government of Argentina was unable to control either of these problems because if the government wanted to control inflation then they would have to either raise the tax or cut down it’s spending, and in both situation, the ultimate burden will be on the people of Argentina.

In the other case, if the government tries to control its budget deficit then it has to borrow from the world market, and the borrowing will result in a further rise in inflation.