As an elected official, you have been informed that real gdp is below its potential and that action should be taken to encourage economic growth and bring the economy to its long-run equilibrium. the marginal propensity to consume is 0.7, and the amount of new government spending is $600 billion. a. what is the multiplier? (compute this to the first place beyond the decimal)b. by how much would the economy be stimulated?

What is the most direct result of free trade supplying productive resources to areas where they're most needed? a. enhanced efficiency b. lower interest rates c. increasing specialization d. greater competition 2b2t

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Suppose that two firms produce differentiated products and compete in prices. as in class, the two firms are located at two ends of a line one mile apart. consumers are evenly distributed along the line. the firms have identical marginal cost, $60. firm b produces a product with value $110 to consumers.firm a (located at 0 on the unit line) produces a higher quality product with value $120 to consumers. the cost of travel are directly related to the distance a consumer travels to purchase a good. if a consumerhas to travel a mile to purchase a good, the incur a cost of $20. if they have to travel x fraction of a mile, they incur a cost of $20x. (a) write down the expressions for how much a consumer at location d would value the products sold by firms a and b, if they set prices p_{a} and p_{b} ? (b) based on your expressions in (a), how much will be demanded from each firm if prices p_{a} and p_{b} are set? (c) what are the nash equilibrium prices?