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4. Imagine a society that produces military goods and consumer goods, which we’ll call “guns” and “butter.”
a. Draw a production possibilities frontier for gun sand butter. Explain why it most likely has a bowed out shape.
b. Show a point that is impossible for the economy to achieve. Show a point that is feasible but inefficient.
c. Imagine that the society has two political parties , called the Hawks (who want a strong military) and the Doves (who want a smaller military). Show a point on your production possibilities frontier that the Hawks might choose and a point the Doves
might choose.
d. Imagine that an aggressive neighboring country reduces the size of its military. As a result, both the Hawks and the Doves reduce their desired production of guns by the same amount. Which party would get the bigger “peace dividend,” measured by the increase in butter production?
Explain.
What is interest sensitivity of money supply and how would you treat it algebraically ?
Why can't business cycles fluctuate with the economic system? Why does it have to be the other way?

A decrease in the tax rates in an economy will cause a
Suppose a Canadian firm imports bananas of $1000 and sells them for $2000 the effect on gdp would be
real GDP has increased an average annual rate of about
real GDP per capita has increased at an average annual of about
The real GDP growth rate minus the real GDP per capita growth rate (i.e,c-d) equals the
Consider a small open economy in equilibrium with a zero current account balance. What happens to national saving, investment, and the current account balance in equilibrium if
(a) future income rises?
(b) business taxes rise?
(c) government expenditures decline temporarily?
(d) the future marginal product of capital rises?
For example I want to calculate national government I have total income(Y) and consumption(C) and have investment(I) also I have import(IM ) but I don't have (G) and (EX)... EXANPLE : If y=1137179925 and c=68439 and I=22783 import=39252 find G? And export
Lonewolf Ltd is the sole manufacturer and supplier of solar panels in the country. As a result of this the CEO claimed in a recent meeting that he can set any price he wishes and sell as many units of his product as he wants at that price. Is this correct? Motivate your answer
How can governments play a role in promoting knowledge based industries in which fixed costs are high and marginal costs are close to zero?