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If the Fed sells $2 million of bonds to the First National Bank, What happens to reserves and the monetary base? Use T-accounts to explain your answer.
If a country wants to keep its exchange rate from changing, it must give up some control over its money supply. Is this statement true, false, or uncertain? Explain your answer.
Compare the use of open market operations, discounting, and changes in reserve requirements to control money supply on the following criteria: flexibility, reversibility, effectiveness, and speed of i
Compare the monetary base to M2 on the grounds of controllability and measurability. Which do you prefer as an intermediate target? Why?
Classify each of the following as either an operating target or an intermediate target, and explain why.
Because the public can see whether a central bank hits its monetary targets almost immediately, whereas it takes time before the public can see whether an inflation target is achieved
Because inflation targeting focuses on achieving the inflation target, it will lead to excessive output fluctuations. Is this statement true, false, or uncertain? Explain your answer.
A country is always worse off when its currency is weak (falls in value). Is this statement true, false, or uncertain? Explain your answer.
A central bank with a dual mandate will achieve lower unemployment in the long run than a central bank with a hierarchical mandate in which price stability takes precedence. Is this statement true, fa
The management of the Mini Mill Steel company estimated the following elasticities for a special type of steel : Ep=2, EI=1, EXY= 1.5 and X refers steel and Y refers aliminum
For Karr Company, the predetermined overhead rate is 140% of direct labor cost. During the month, Karr incurred $90,000 of factory labor costs, of which $80,000 is direct labor and $10,000 is indirect
Select ONE of these lessons (principles), (the standard of living depends on a country's production)and explain a/some pattern/s of behaviour that you have observed in the media (newspapers, televisio
Explain how and why firms practice 3rd degree price discrimination. Use the handout to illustrate your answer (coupons; airlines, mobile phones).
Briefly explain the Microsoft case, focusing on precisely how Microsoft was alleged to have violated the Sherman Act? What was the outcome of the case and why was that decision made?
Graph the typical consumer’s demand curve. Use your graph to figure out what price Philadelphia Electric should charge for the first 400 Kilowatts used. What should it charge for the next 400 Ki
Scarcity underlies the need for an economic system of any type. What is scarcity? Is it possible to ever eliminate scarcity? In what two ways could an economy try to eliminate scarcity? Will these att
What is the marginal productivity of labor? Demonstrate What is the marginal productivity of Capital? Demonstrate Is the productivity of the inputs a decreasing or an increasing function (does the fun
Property rights are protected in the current laws of states usually found in the form of a constitution or a bill of rights. The United States Constitution provides explicitly for the protection of pr
Suppose we have a simultaneous moves entry game where the incumbent and the entry have to both decide on the strategies at the same time
Suppose that federal law requires that the price be the same in both locations. What price will Kayla charge now? How many gallons will be purchased? And what happens to her profit?
A gasoline station very near a professional football stadium parks cars on its lot to make money on game days. Last year it charged $4.00 per car and parked 1,000 cars. This year it raised the parking
What is the price elasticity of supply of land in Manhattan? What is the price elasticity of supply for land dedicated to a specific use, such as apartment buildings or office buildings? How do your a
What are the types of circumstances under which price discrimination violates antitrust? Use the handout to illustrate your answer (examples included in Section 15.5 – Antitrust: Price Discrimin
Computing an allocation for a planned socialist economy is prone to great computational difficulties.
The presumption of efficiency for capitalism is based on the model of perfect competition. Explain the assumptions underlying the model of perfect competition. Provide an example showing how the US ec