Draw a saving—investment diagram to show how each of the following changes shifts the IS curve
(a) Future income rises.
(b) The future marginal productivity of capital increases.
(c) Government purchases decrease temporarily.
(d) The effective corporate tax rate increases.
(a) IS shifts up and to the right.
(b) IS shifts up and to the right.
(c) IS shifts down and to the left.
(d) IS shifts down and to the left.
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Jason wants to hire Maria to tutor him in economics. Jason is willing to pay $30 for the first hour of tutoring, $25 for the second, $20 for the third, $15 for the fourth, and $10 for the fifth
Maria has an opportunity cost per hour of $6 for the first, $9 for the second, $12 for the third, $15 for the fourth, and $18 for the fifth. The initial equilibrium price for tutoring is $15 an hour and hence Maria tutors Jason for 4 hours. Now, Maria realizes that she is the only economics tutor because all the other tutors have graduated. Because she is the only tutor, she has a monopoly and, as a monopolist, Maria decides to charge a price of $25 instead of $15 an hour. a. At the price of $25 an hour, how many hours will Maria tutor Jason? b. At the initial equilibrium price of $15 an hour, what was Jason's total consumer surplus and Maria's total producer surplus? c. At the price of $25 an hour, how many hours will Jason hire Maria to tutor him? What is Jason's total consumer surplus and Maria's total producer surplus? d. How does the sum of Jason's consumer surplus plus Maria's producer surplus compare at the initial equilibrium price of $15 an hour (part b) and at the new price of $25 an hour (part c)? Comment on any difference.
A common response to stop a depreciation of a currency is to use contractionary monetary policy, which could lead to a recession
Indicate whether the statement is true or false