principles of macroeconomics
Explain the concept of “economies of scale” and “increasing returns”.
1. Examples of command economies are: A. The United States and Japan. B. Sweden and Norway. C. Mexico and Brazil. D. Cuba and North Korea.
What is the impact on income or output and price of excess demand (Inflationary gap)? Answer: In the condition of excess demand (that is Inflationary gap) there wil
Imports and American cars are much close however not perfect replacements. When the U.S. govt. tried to enhance American car sales by setting a price ceiling of P1 on imported cars: (i) The quantity of cars imported will drop/fall from Q0 to Q1. (ii)
What is meant by the term business cycle as described by economists?
Describe open market operations? What is its consequence on availability of credit? Answer: Open market operations signify the purchase and sale of government secur
What are the conditions through which the supply curve will shift?
The hypothetical information in the following table shows what the economic situation will be in 2015 if the Fed does not use monetary policy: Year Potential GDP Real GDP Price Level 2014 $15.2 trillion $15.2 trillion 110.0 2015 $15.6 trillion $15.8 trillion
The usual household maximizes the utility by spending all its money to purchase and consume a combination of goods which yields: (1) Fundamental physiological requirements and customary wants. (2) Maximum status and the social prestige. (3) Complete satisfaction of al
Task 1 – Commercial banks in United Economy have total deposits of AED 300 billion. Their reserves are AED 15 billion, two- thirds of which are with the Central Bank as deposits. There are AED 30 billion notes outside the banks. There are no coins! Calculate- a) The monetary base. b) The bank
State main sources of demand for foreign currency? Answer: The four main sources of demand for foreign currency are as follows: A) To buy services and goods from other countries. B) To send a gift abroad.
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