Microeconomics (6th Edition)
6th Edition
ISBN: 9780134106243
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 1, Problem 1.3.10PA
To determine
Economic model.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
And now for some Shakespeare (who says economists aren’t cultured!). In Shakespeare’s play Hamlet, Ophelia says, “If I could lend money at the rates I must pay to borrow, I would. And if I could borrow money at the rates I receive when I lend, I would again. But forsooth, although I spend, I neither borrow nor lend.” Contrary to common belief, Ophelia is entirely rational according to our intertemporal model. Draw a diagram to show how Ophelias remarks can be consistent with rational behavior and smooth convex preferences if she pays a higher interest rate when she borrows than she gets when she lends. Explain what happens in words. (Please draw a clear graph and explain) I will give you a big like if your answer make sense.
Briefly explain the main macroeconomic aims of government policy?
In briefly Explain the government budget deficit and debt and how this can cause crowding out for loanable funds in the market.?
Chapter 1 Solutions
Microeconomics (6th Edition)
Ch. 1.A - Prob. 1PACh. 1.A - Prob. 2PACh. 1.A - Prob. 3PACh. 1.A - Prob. 4PACh. 1.A - Prob. 5PACh. 1.A - What is the area of the triangle shown in the...Ch. 1.A - Prob. 7PACh. 1 - Prob. 1TCCh. 1 - Prob. 2TCCh. 1 - Prob. 1.1.1RQ
Ch. 1 - Prob. 1.1.2RQCh. 1 - Prob. 1.1.3PACh. 1 - Prob. 1.1.4PACh. 1 - Prob. 1.1.5PACh. 1 - Prob. 1.1.6PACh. 1 - Prob. 1.1.7PACh. 1 - Prob. 1.1.8PACh. 1 - Prob. 1.1.9PACh. 1 - Prob. 1.1.10PACh. 1 - Prob. 1.1.11PACh. 1 - Prob. 1.2.1RQCh. 1 - Prob. 1.2.2RQCh. 1 - Prob. 1.2.3RQCh. 1 - Prob. 1.2.4RQCh. 1 - Prob. 1.2.5PACh. 1 - Prob. 1.2.6PACh. 1 - Prob. 1.2.7PACh. 1 - Prob. 1.2.8PACh. 1 - Prob. 1.2.9PACh. 1 - Prob. 1.2.10PACh. 1 - Prob. 1.2.11PACh. 1 - Prob. 1.2.12PACh. 1 - Prob. 1.2.13PACh. 1 - Prob. 1.3.1RQCh. 1 - Prob. 1.3.2RQCh. 1 - Prob. 1.3.3RQCh. 1 - Prob. 1.3.4PACh. 1 - Prob. 1.3.5PACh. 1 - Prob. 1.3.6PACh. 1 - Prob. 1.3.7PACh. 1 - Prob. 1.3.8PACh. 1 - Prob. 1.3.9PACh. 1 - Prob. 1.3.10PACh. 1 - Prob. 1.3.11PACh. 1 - Prob. 1.4.1RQCh. 1 - Prob. 1.4.2RQCh. 1 - Prob. 1.4.3PACh. 1 - Prob. 1.4.4PA
Knowledge Booster
Similar questions
- Suppose that Antonio, an economist from a business school in Georgia, and Caroline, an economist from a university in Massachusetts, are arguing over budget deficits. The following dialogue shows an excerpt from their debate: Caroline: Most people recognize that the budget deficit has been rising considerably over the last century. We need to find the best course of action to remedy this situation. Antonio: I believe that a cut in income tax rates would boost economic growth and raise tax revenue enough to reduce budget deficits. Caroline: I actually feel that raising the top income tax rate would reduce the budget deficit more effectively. The disagreement between these economists is most likely due to . Despite their differences, with which proposition are two economists chosen at random most likely to agree? Having a single income tax rate would improve economic performance. Immigrants receive more in government benefits than they contribute in taxes.…arrow_forwardsuppose that Sean, an economist from a university in Arizona, and Yvette, an economist from a university in Massachusetts, are arguing over saving incentives. The following dialogue shows an excerpt from their debate: Yvette: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. Sean: I think a switch from the income tax to a consumption tax would bring growth in living standards. Yvette: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't. The disagreement between these economists is most likely due to differences in scientific judments/differences between perception versus reality/ or differences in values . #2 Despite their differences, with which proposition are two economists chosen at random most likely to agree? Tariffs and import quotas generally reduce…arrow_forwardUsing a graph and words, explain the effect of SRAS and LRAS curves when the President of the United States would give businesses who invested in new plant and equipment an investment tax credit equal to 10 percent of their investment and the marginal tax rate has been reduced to people who make over $50,000 and are permanent. Will you work more or less when marginal tax rates are cut and will businesses invest more in plant and equipment when an investment tax credit has been implemented by the President of the United States? Also explain in your graph what will happen to equilibrium price level and equilibrium real GDP and the unemployment rate when the marginal tax rates are cut and are permanent for people making over $50,000 and the investment tax credit has been implemented by the President of the United States.arrow_forward
- Agreement and disagreement among economists Suppose that Musashi, an economist from a business administration program in Georgia, and Rina, another economist from a nonprofit institution in the Midwest, are both guests on a popular science podcast. The host of the podcast is facilitating their debate over saving incentives. The following dialogue represents a portion of the transcript of their discussion: Rina: I think it's safe to say that, in general, the savings rate of households in today's economy is much lower than it really needs to be to sustain an improvement in living standards. Musashi: I think a switch from the income tax to a consumption tax would bring growth in living standards. Rina: You really think households would change their saving behavior enough in response to this to make a difference? Because I don't. The disagreement between these economists is most likely due to DIFFERENCES BETWEEN PERCEPTION VERSUS REALITY or DIFFERENCES IN SCIENTIFIC JUDGEMENTS…arrow_forwardwhat is the meaning of ripple effects and how does it affect an economy?arrow_forwardBriefly explain the accelerator model of investment.arrow_forward
- The table gives the government outlays and tax revenues from 2015 through 2019 for two countries. Year Country A Government outlays (trillions of 2012 dollars) Country A Tax revenue (trillions of 2012 dollars) Country B Government outlays (trillions of 2012 dollars) Country B Tax revenue (trillions of 2012 dollars) 2015 0.75 0.80 1.05 1.10 2016 0.80 0.83 0.90 0.92 2017 0.87 0.86 0.87 0.88 2018 0.95 0.95 0.85 0.83 2019 1.06 1.02 0.70 0.75 In 2017 country A had a ________ and country B had a ________. A. budget deficit; budget deficit B. budget surplus; budget deficit C. budget surplus; budget surplus D. budget deficit; budget surplus E. balanced budget; budget deficitarrow_forwardIn the fifty years before the covid-19 pandemic, the U.S. also suffered two deep recessions, in 1981-82 and 2007-2009. (As you know, the second was the Great Recession.) Based on the historical evidence in the chart, about how high does the unemployment rate rise in terrible recessions like those? Briefly explain.arrow_forwardWhat is Ricardian Model? What are the assumptions of Ricardian Model?arrow_forward
- The table contains information about the nation of Syldavia. There are no income taxes or imports in this nation. Real GDP, Y (billions of 2012 dollars) Consumption expenditure, C (billions of 2012 dollars) Investment, I (billions of 2012 dollars) Government expenditure, G (billions of 2012 dollars) 15 6 5 5 20 10 5 5 25 14 5 5 30 18 5 5 35 22 5 5 The marginal propensity to consume in Syldavia is equal to A. 0.40. B. 5.00. C. 0.80. D. 0.75. E. 0.20.arrow_forwardwhat is Ricardian Model? explainarrow_forwardBriefly explain the role played by banks between savers and borrowers and how the economy benefits (or not) from their taking on this role.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics 2eEconomicsISBN:9781947172364Author:Steven A. Greenlaw; David ShapiroPublisher:OpenStax
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage LearningEconomics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Principles of Economics 2e
Economics
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:OpenStax
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co