With the aid of a diagram(s) predict what would happen to the equilibrium price of marijuana if it were legalized
September 15, 2020
Suppose that the U. government decides to charge beer consumers a tax Before the tax, 20 billion six packs are sold every year at a price of $8 per…
September 15, 2020

Suppose the consumption function is C = $600 billion + 0.9Y and the government wants to stimulate the economy. At current prices, by how much will aggregate demand shift initially (before multiplier effects) with: a) A $100 billion increase in government purchases? b) A $100 billion tax cut? c) A $100 billion increase in income transfers? What will the total (including the multiplier effect) AD shift be for: d) The increased G? e) The tax cut? f) The increased transfers?

KM
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