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Econ 157

HW # 2

Instructions: Please write clear, concise, and NEAT answers. I should tell you that, in the exams, if I cannot understand what you write, then, I will assume that it is wrong.

AK:  http://www.youtube.com/watch?v=c2LyzR2PEgs

1) Read O’Sullivan notes on input-output analysis and do exercise # 13. Notes are available on BB.

2)  In the Kansas City, MO-KS Metropolitan Area two important firms are in trouble:  1) a large agricultural firm that produces $100 million worth of products every year and employs 2000 workers and  2) a large hotel that produces $50 million of yearly sales and employs 3000 workers. The local government has funds to subsidize and prevent the closing of only one firm. Please, in less than 300 words, write a report where you assess what are the effects of closing down these firms and give a policy recommendation to the major.  Please, include tables and document all your calculations. (Note that you will need to use the table on page 55 in the Regional Multiplier report posted on Blackboard to answer this question.)