The objectives of long-run growth policy andshort-run stabilization policy.

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Answer 1

Question

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.

Economics Concept Introduction

Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.

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16:10 ← BEC 3701 - Assignments-... KWAME NKRUMAH UNIVERSITY TEACHING FOR EXCELLENCE SCHOOL OF BUSINESS STUDIES DEPARTMENT OF ECONOMICS AND FINANCE ADVANCED MICRO-ECONOMICS (BEC 3701) Assignments INSTRUCTIONS: Check instructions below: LTE 1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of the following: a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks] b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks] c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks] d) the Expenditure Function E(P1, P2, U°) [3 Marks] e) Draw a diagram of the solution. There should be two graphs, one above the other; the first containing the indifference curves and budget constraint that characterize the solution to the consumer's choice problem; the second characterizing the demand…

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Answer 2

Question

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.

Economics Concept Introduction

Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.

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Answer 3

Question

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.

Economics Concept Introduction

Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.

Want to see more full solutions like this?

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

Answer 4

Question

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.

Economics Concept Introduction

Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.

Want to see more full solutions like this?

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

Answer 5

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.

Economics Concept Introduction

Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.

Answer 6

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.

Economics Concept Introduction

Economic growth: Economic growth refers to an increase in the market value of goods and services over a period of time in an economy.

Answer 7

Chapter 23, Problem 1DQ

To determine

The objectives of long-run growth policy andshort-run stabilization policy.

Answer 8

Expert Solution & Answer

Explanation of Solution

Major objective of long-run economic growth includes capital formation, human capital investment such as education and training, and progress in new technology. Such policies aim to increase the market value of goods and services over a period of time by shifting of production function to the right. This ensures higher economic growth rate in the economy. The stabilization policies include the intervention with the expansionary and contractionary policies to stabilize the economy when the economy moves below and above the potential level of real GDP in the short run. Hence, it controls the higher unemployment or inflation will not be a problem.