The United States spends far more than other countries on healthcare. Interestingly, when queried in opinion polls, the American public believes that we should actually spend more, not less, on healthcare. How would one evaluate whether this spending is worthwhile? What reasons might there be for being concerned about the validity of such assessments?

. Using aggregate demand and aggregate supply analysis, show the effects of the following (Assume a Keynesian aggregate demand curve and ordinary upward-sloping aggregate supply curve.): a. a decline in the price level b. an increase in export spending c. an increase in the price of resources. d. an income tax cut e. an increase in the value of the dollar

Suppose that the defense contracting business is perfectly competitive. In long -run equilibrium the price just covers average production cost, and every contractor makes zero profit. Thus, if the price goes down, even a little bit, due to a decrease in government defense spending, all contractors will go out of business. Discuss this statement.

1. If inflation is a major issue in the economy, what would be the correct fiscal policy response from an economic perspective? Why would members of Congress be unlikely to support such actions?

  2.   Why is the tax multiplier smaller than the government spending multiplier?

Note :- Please avoid Plagiarism( not copy paste from other post)

A firm using MEc tools finds that the 2-inputs in its 2-input production arrangement is inefficient. Describe how that inefficiency is manifested in terms of the inputs and spending. Also, briefly discuss the choice the firm faces with regard to outputs OR its budgetary outlays devoted to production. How could it spend less with the same budget?

Use the IS-LM analysis to explain the following. Please also state what determines the size of effect on GDP and interest rates. What are the effects on the AD analysis? Try to use graphs and pictures to answer your questions.

a) Government spending decreases

b) The central bank increases policy rates

c) Government increases taxes.

Explain why government budget deficits crowd out private investment spending in a closed economy, but crowd out net exports in a small open economy. Assume prices are flexible and that factors of production are fully employed in both economies. Use the basic version of the open-economy model that abstracts from foreign debt accumulation.

Exercise 12-15 Dropping or Retaining a Segment [LO12-2]

Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:

*Common costs allocated on the basis of machine-hours.

†Common costs allocated on the basis of sales dollars.

Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.

Required:

What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

Exercise 12-15 Dropping or Retaining a Segment [LO12-2]

Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:

*Common costs allocated on the basis of machine-hours.

†Common costs allocated on the basis of sales dollars.

Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.

Required:

What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

Exercise 12-15 Dropping or Retaining a Segment [LO12-2] Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows: Thalassines Kataskeves, S.A. Income Statement—Bilge Pump For the Quarter Ended March 31 Sales $ 490,000 Variable expenses: Variable manufacturing expenses $ 124,000 Sales commissions 51,000 Shipping 21,000 Total variable expenses 196,000 Contribution margin 294,000 Fixed expenses: Advertising (for the bilge pump product line) 23,000 Depreciation of equipment (no resale value) 105,000 General factory overhead 31,000 * Salary of product-line manager 116,000 Insurance on inventories 12,000 Purchasing department 45,000 † Total fixed expenses 332,000 Net operating loss $ (38,000 ) *Common costs allocated on the basis of machine-hours. †Common costs allocated on the basis of sales dollars. Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.

Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?