Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Chapter 17, Problem 5DQ
To determine
Check whether the statement regarding tax is acceptable or not.
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Economics: Principles & Policy
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- 2. Every time we start to have fun, the government ruins it! You run a construction company where you build residential homes. For the past 3 years, demand for new homes has risen significantly, and your company tripled its size. The main driver for the rise in demand is high GDP growth. People are making good incomes, and they are demanding more houses. The positive outlook many people have about the economy makes you believe that you need to expand your business even further to another state, which requires you to open an office there and hire at least 50 people. While sitting with your family in the evening enjoying some sweets and watching TV, you heard the news reporter state the following: "The central bank has decided to raise interest rates to influence consumer spending to try to control inflation. The economy has been doing very well for 3 consecutive years, and economic growth is still accelerating, which could lead to a spike in prices." Your spouse, who was watching TV…arrow_forward1. You only need to speak 400 languages in Sudan! Sudan, a country rich in culture and natural resources, is in the northeastern part of the continent of Africa. Sudan has more than 500 distinct ethnic groups and over 400 languages. According to the International Monetary Fund, GDP growth rate in Sudan was negative 4.2% (-4.2%) as of April of 2024. Two politicians came forward and proposed different ways to solve the GDP negative growth and to achieve full employment. They are Mr. Abdul and Mrs. Ibrahim. Mr. Abdul’s proposal is this: Because people don’t have money to spend, let’s give them $5,000 each. This way they can have what they need and improve their standard of living. Their demand for goods and services will then stimulate production and, thus, the demand for labor, leading to a lower unemployment rate. Mrs. Ibrahim’s proposal is this: Because production in the economy is low, leading to a decline in GDP, let’s lower the interest rate so people will borrow more money to…arrow_forwardYou are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Analysts at your firm have determined that group s elasticity of demand is while group s is Your marginal cost of producing the product is $ a Determine your optimal markups and prices under thirddegree price discrimination. b Identify the conditions under which thirddegree price discrimination enhances profits.arrow_forward
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