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Explain how inflation affects consumption in a cash in advance model (with transfers). What causes this to happen and explain how a government collects revenue via seigniorage
Suppose the domestic price (no-international-trade price) of copper is $1.20 a pound in the United States while the world price is $1.00 a pound. Assuming no transportation costs, the United States wi
While US GAAP requires assets to be valued at the lower of cost or market, there is a belief that assets with value fluctuations should be valued at market and adjusted on a regular basis. Create an a
Gruel is an inferior good. Hence, an increase in consumer income decreases the supply of gruel increases the supply of gruel decreases the demand for gruel increases the demand for gruel
A private closed economy includesA.households, businesses, and international trade, but not government. B.households, businesses, and government, but not international trade. C.households only. D.hous
Susan begins to examine shifts in demand for shoes. She discovers that as the population increases then it is likely that there will be a shift in demand to the right for shoes. She also discovers tha
Explain how Ricardian Equivalence works and explain how to get the quantity theory from the equation of exchange
Using your own words, define market imperfections. To support your definition, include at least two examples. Do not include the examples from the book create your own examples.
The GDP fails to capture changes in the availability of leisure time and often fails to reflect changes in the quality of products or in the availability of new products." Discuss this statement from
Explain the difference between absolute advantage and comparative advantage. Which is more important in determining trade patterns, absolute advantage or comparative advantage? Why?
The percentage of the U.S. labor force that belongs to labor unions has been declining for several decades? What are some of the reasons that labor unions are less prevalent today than they were forty
Mary wants to get more money from her house cleaning business. Why doesn t Mary try to increase her revenue by lowering her price below the prevailing market price?
People who want to work but have stopped looking for work because they could not find jobs after actively searching are called
Microeconomics focuses principally on social and political issues, while macroeconomics involves the study of a nation's monetary system.
The Law of Demand states that the demand for a product is inversely related to the price of such product. Therefore, the demand for a product is considered downward sloping. This implies that quantity
Firms can shift their marginal cost curves to the right, resulting in higher outputs at the same or lower maximum-profit prices. This can be done by
Suppose that US prices rise 4 percent over the next year while prices in Mexico rise 6%. According to the purchasing power parity theory of exchange rates, what should happen to the exchange rate betw
Considering an economy with a current trade deficit and considering only the direct effect on income, an expansionary monetary policy tends to
Use the national income identity GDP= C + I + G + X to explain what a current account deficit(negative net exports) means in terms of domestic spending, production, and borrowing
What will this do to the demand curve? Of the available list of things in the text that causes a change in demand, which best fits here as the cause of the demand shift?
Which definition(s) of the money supply include(s) only items which are directly and immediately usable as a medium of exchange?
What are two ways for a competitive firm to determine the optimal level of production, that is, the level of production that will maximize profit or minimize losses?
By specializing in the production of one good, a company is able to benefit from economies of scale which increases its revenue. Which of the following is an attribute of specialization?
Branding Iron Products a specialty steel fabricator operates a plant in the town of West Star, Texas. The Town has grown rapidly because of recent discoveries of oil and gas in the area. Many of the n
Copy the budget line and indifference curve I2 on your answer sheet. Suppose the prices of good X decrease by $2 per unit. Sketch (as accurately as you can) the new budget line in the diagram and indi