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Larry's marginal rate of substitution of leisure for income and the person's optimal number of hours worked is seven hours, then the wage rate must be
Clearly explain how net foreign investment links the market for loanable funds and the market for foreign currency exchange. Make sure you define net foreign investment in your answer.
Use the multiplier to indicate how a decrease in investment of R50 will affect the GDP. Show all caluclations. Illustrate this on a graph
President Chavez Venezuela said he is going to not sell oil to the United States. What will happen to the price and quantity of gasoline in the United States?
Discuss the incomes and expenditures in terms of the Keynesian model. You can agree and/or disagree with the Keynesian assumptions.
The “net exports effect” is the impact on a country’s total spending caused by an inverse relationship between the price level and the net exports of an economy. Using this principle
Assume that James owns a wheat farm that produces an annual crop of 500 bushels. His only choice is to store it in a nearby grain elevator owned by Martin
Suppose a developed nation’s economy historically had an economic growth rate of 3% but over the last 10 years, that rate hovered around 2%. In the last two years, assume it appears to hav
Suppose the U.S. economy is in a recession which came from a negative AD shock. To provide consumers with an incentive to spend more of their disposable incomes, Congress and the President pass
Suppose the U.S. economy is in a recession and there is rising inflation. Suppose you are in charge of monetary, fiscal, and exchange rate (i.e., influencing the value of the dollar) policies.
Assume the economy initially is in a long run equilibrium plus the following: the U.S. dollar is relatively strong against all major foreign currencies. Suppose the Congress and the Presid
Conduct research on the economic performance of United State of America over the last ten years from 2004 to 2013, applying the macroeconomic indicators of real GDP, real GDP growth rate, real GDP per
Groups need to choose a topic from the list of topics provided by the lecturer and write an essay on the chosen topic. (This list is placed under additional readings on your BB)
Suppose, during the last year, in a closed economy (net exports=0), consumption expenditures were $20 billion, investment was $12 billion, government purchases were $20 billion, and the underground ec
You invest R2400 annually (at the end of each year) for successive years in a savings account at 15% p.a. (interest is compounded per year). At the end of the fifth year you withdraw R6181.72 and the
What does it cost you to sleep through one of the 30 lectures in a course for which you paid $2000 in tuition? Do students put more effort into courses for which they have to pay higher tuition to tak
Does the monopoly serve both groups of customers? Compare the monopoly’s profit from the optimal pair of two part tariffs with the profit that she could make if she ignored the poor consumers al
How will this policy-change affect outpatient care market and what will be effect of this hospital admission reviews on the insurance market?
A country has experienced a recession during which, in addition to the decline in output and the increase in unemployment, there is a reduction in interest rates. discuss the possible causes behind th
Brazil’s president, Dilma Rousseff, and her finance minister, Guido Mantega, are attacking the U.S. Federal Reserve for aggressively buying bonds and driving the exchange rate of the dollar down
If the real interest rate is less than the growth rate of output, explain why governments can run a deficit yet not have to worry about the size of their debt.
If the nominal GDP is $559 billion in the base year, and it rises to 577 in Year 1, and 605 in Year 2, what is the real GDP in each year, given that the price index has risen from 100 to 104.5 in the
GDP is $14 trillion. government wishes to increase real gdp to 15 trillion. marginal propensity to consume (mpc) is 0.8, and every $1.00 increase in real government spending crowds out $0.50 in real p
Consider our standard formula for GDP: Y=C+I+G+X. Additionally note that consumption is given by: C = a+b(Y-T) where T= -20+0.2Y. You also know that : a=150 ; I = 500 ; G = 385 ; X = -7
What will happen to Y (GDP), r (real interest rate), P(price level), and I(investment), in the short run ?The answer should indicate will these values increase or decrease in the short run.