Macroeconomics (9th Edition)
9th Edition
ISBN: 9780134167398
Author: Andrew B. Abel, Ben Bernanke, Dean Croushore
Publisher: PEARSON
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Question
Chapter 2, Problem 4NP
(a)
To determine
To find: the contribution made to
(b)
To determine
To find: the contribution made to GDP of current year in terms of production, expenditure and income with respect to the transaction which involves in purchasing a historical mansion at a brokerage fee of 6%.
(c)
To determine
To find: the contribution made to GDP of current year in terms of production, expenditure and income with respect to the transaction which involves a homemaker becoming part of the workforce.
(d)
To determine
To find: the contribution made to GDP of current year in terms of production, expenditure and income with respect to the transaction which involves a Japanese firm constructing an auto plant in the U.S.A
(e)
To determine
To find: the contribution made to GDP of current year in terms of production, expenditure and income with respect to the transaction which involves in a lottery winning.
(f)
To determine
To find: the contribution made to GDP of current year in terms of production, expenditure and income with respect to the transaction where an individual appears on television in publicizing a state lottery.
(g)
To determine
To find: the contribution made to GDP of current year in terms of production, expenditure and income with respect to the transaction where a vehicle fleet is being replaced with the old ones sold.
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Problem 2. If the consumer preference can be represented by a CES function with δ = 0.5, i.e. u(x, y) = x0.5 + y0.5. Let the prices and income be (px, py, w).
1. Set up the Lagrangian expression.2. Take the first-order conditions.3. Substitute into budget constraint to derive the optimal consumption bundles.
Chapter 2 Solutions
Macroeconomics (9th Edition)
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