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Explain the Coase Theorem and its implication towards our economy
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- The data in columns 1 and 2 in the table below are for a private closed economy. (1) Real Domestic Output (GDP = DI), Billions (2) Aggregate Expenditures, Private Closed Economy, Billions (3) Exports, Billions (4) Imports, Billions (5) Net Exports, Billions (6) Aggregate Expenditures, Private Open Economy, Billions $300 $340 $20 $30 350 380 20 30 400 420 20 30 450 460 20 30 500 500 20 30 550 540 20 30 600 580 20 30 650 620 20 30 a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy. $________billion b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in the gray-shaded cells in columns 5 and 6. What is the equilibrium GDP for the open economy? $_______ billion What is the change in equilibrium GDP caused by the addition of net exports? $_______billion c. Given the original $20 billion level of exports, what…What is the outcome of the Stolper-Samuelson Theorem??? Account for lessons derived and offer appropriate policy recommendations.Wenatchee is a town on a large river. On the other side of the river is East Wenatchee (since the river is the county line, these are in two different counties and thus, two different cities.) Wenatchee (which I refuse to call "West Wenatchee") is pretty much hemmed in on all sides by mountains. East Wenatchee, on the other hand, sits on a large plateau surrounded by wheat fields. Assume that housing in Wenatchee and housing in East Wenatchee are what economists call "perfect substitutes." This means basically that people don't care whether they live in Wenatchee or East Wenatchee. Then imagine that in the nearest big city there is a pandemic followed by a bunch of riots. Part of the town is taken over by Marxists revolutionaries. The city starts dismantling the police and raising taxes because they have no money. (Just try to imagine it!) and this causes a lot of people to decide it would be nice to live in a smaller town on the other side of the mountains. Which will grow…
- Describe the FOUR classical types of potential market failure, in detail, and provide examples of each type. What is the relevance of the concept of market failure to government intervention in the economy? Explain as fully as possibleYou are hired to work as economic advisor to His Excellency the PrimeMinister of Xanadu, an imaginary country that suffers from a severe recession condition due tothe Novel Coronavirus Pneumonia (COVID-19) pandemic.What are your recommendations for an urgent plan to rescue the economy of Xanadu?Specifically, what government policy actions are required? Explain to His Excellency thepossible drawbacks of your recommended course of actions.An economy depends on two basic products, wheat and oil. To produce 1 metric ton of wheat requires 0.23 metric tons of wheat and 0.32 metric tons of oil. Production of 1 metric ton of oil consumes 0.08 metric tons of wheat and 0.13 metric tons of oil. Find the production that will satisfy a demand for 500 metric tons of wheat and 870 metric tons of oil. The input-output matrix is Aequals left bracket Start 2 By 2 Matrix 1st Row 1st Column 0.23 2nd Column 0.08 2nd Row 1st Column 0.32 2nd Column 0.13 EndMatrix right bracket. [ ? ]metric tons of wheat is required to satisfy the demand.
- Define "Green Revaluation'Explain its Advantages and Disadvantages.An economist who believes the economy is self-regulating is more likely to advocate laissez-faire than an economist who believes the economy is inherently unstable. Do you agree or disagree, explain your answer using appropriate diagramPropose THREE solutions that you think might assist policymakers and internal or external stakeholders to recover the economy due to the COVID-19 pandemic.
- propose 3 solution that you think might assist policymaker and internal or external stakeholder to recover the economy due to the covid-19 pandemic.Assume that in a hypothetical country, coal mining is a significant industry, hiring a high proportion of that country’s workforce. Describe, in a short essay inserted below this question, how a significant decline in coal mining, as the country attempts to switch to environmentally safer production, can ripple through the entire economy, and how the government can use fiscal policy tools to combat such negative effectsDescribe some government intervention in the economy with the intent of controlling prices. Identify the parties who benefit and those who are or will be hurt by this intervention. What unintended consequences will likely or have occurred as a result of this intervention.