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Suppose that a fall in consumer spending causes a recession. a. Illustrate the changes in the economy using both an aggregate-supply/aggregate-demand diagram and a Phillips-curve diagram
Potatoes cost Janice $1.10 per pound, and she has $5.00 that she could possibly spend on potatoes or other items. If she feels that the first pound of potatoes is worth $1.50, the second pound is wort
Assume that the interest parity condition holds and that both the expected exchange rate and foreign interest rate are constant. Given this information, an increase in the domestic interest rate will
For this question, assume that expected inflation this year is equal to past year's inflation. Also assume that the unemployment rate has been equal to the natural rate of unemployment for some time.
Explain the difference between the Keynesian and monetarist views on how an increase in the money supply causes inflation and why is the shape of the aggregate supply curve important to the Keynesian-
What is the logic behind the campaign and what role do incentives play here - Explain why most seniors often earn lower grades in their last semester before graduation.($1,000)
What are the equilibrium real wage rate, the quantity of labour employed in 2010, labour productivity and potential GDP in 2010? In 2011, the population increases and labour hours supplied
What is the short-run equilibrium, real GDP and price level and does Japan have an inflationary gap or a recessionary gap? What fiscal policy can be used to correct this gap?
What happens to the money supply, interest rates, and the economy in general if the Federal Reserve is a net seller of government bonds?
All other factors held constant, what would be the effect on the demand for money (M1) of each of the following situations. Explain the rationale behind your responses.
Explain the following statement: "Changes in disposable income lead to movements along the consumption function while changes in wealth lead to a shift of the consumption function." Use examples to il
What do we mean when we say export are exogenous and import are endogeneos?
Suppose you are an executive director of the top management team of an American multinational.
Why are banks able to maintain reserves that are only a fraction of the demand and savings deposits of their customers? Is your money safe in a bank? Why or why not?
Assume that incomes of the consumers in this market increases. What would happen in this market? Explain your answer and reconstruct the graph developed in question one to show this change.
Tommy spends most of his monthly budget on $3 video game rentals or $6 packets of Pokemon cards. The opportunity cost to Tommy of an extra packet of Pokemon cards is:
What impact would a change that shifts an economy's production possibilities curve outward have on the long run aggregate supply curve? How have improvements in computer technology affected production
Considering an economy with a current trade deficit and considering only the direct effect on income, an expansionary monetary policy tends to
Suppose that consumer spending is expected to decrease in the near future. If output is at potential output, which of the following policies is most appropriate according to the AS/AD model
Supposed that the government responds to complaints about adecrease in real wages as a result of immigration by legislating aminimum real wage that is equal to the real wage in thepre-immigration eq
Your company is considering the purchase of new earth movingequipment. The total purchase is $240,000 and we pay with $100,000 cash and borrow therest. (12% per year nominal, compounded monthly for
Governments of country A and country B spend the same amounteach year. Spending on functions relating to dealing with marketexternalities and public goods accounts for 25 percent ofgovernment expend
only one tester may be bought and the press will not need overhauling if the line improvements are not made. what mutually exclusive project combinations are available if Angus Auto will invest in a
Suppose households believe that greater government borrowing today implies higher taxes to pay off the government debt in the future. What does this belief do to private saving and the supply of loa
Show how this tax affects the market for Roquefort cheese in the United States,shifting the appropriate curve and indicating a new equilibrium quantity and market price.