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What would you suggest we do to reduce our trade deficit? We run huge trade imbalances with two countries. Explain the cause of the imbalances.
Explain why globalization is good for the United States. What are the drawbacks of global ization for our economy?
Are you eligible for the Earned Income Tax Credit? How many dollars and cents per hour would a person working a 40-hour week need to work to keep a family?
Compare and contrast the conservative and liberal views of poverty. Practical Application: What steps would you take to cut our poverty rate in half?
There are several theories of the causes of poverty. Why can't a single theory explain all the poverty in the United States?
Discuss the basic determinants of income distribution. What's the difference between the distribution of income and the distribution of wealth?
Which has a higher present value: (a) $100 in 10 years when the interest rate is 2 percent, or (b) $100 in 3 years when the interest rate is 8 percent?
If the interest rate is 10 percent and a dollar will be paid to you in three years, what is the present value of that dollar (to the nearest 10th of a cent)?
Calculate the poverty rates of both nations. Twenty-five percent of Turkey's population is under age 18, 5 million of whom are poor.
Find the nation's (a) balance of goods, (b) balance of services, and (c) balance of trade.
Algeria has a negative trade balance of $7 billion. If it has a positive balance of goods of $10 billion, how much is its balance of services?
If you could buy a market basket of goods and services in the United States. Is the ruble undervalued or overvalued relative to the dollar? by what percentage?
Brazil ran a current account deficit of $55 billion. What is its balance on the capital account? What is the country's current account balance?
Discuss how government policies can influence economic growth. Describe how trade deficits or surpluses can influence the growth of productivity and GDP.
For this assignment, you'll examine at least one of the macroeconomic indicators or policies below within the context of industry you have previously selected.
Choose an existing product (already in the market). Identify the product market. You are NOT required to estimate its demand curve.
Why should the federal minimum wage be raised? Should the current federal income tax be lowered to reduce unemployment?
How did the Phillips curve get its name? The Phillips curve relationship examined in this chapter is a positive relationship between what two variables?
Explain how the Friedman-Lucas money surprise model works. When real aggregate output is equal to trend output, what is the inflation rate equal to?
What is the effect of an increase in expected inflation on the Phillips curve? What causes a change in the slope of the Phillips curve?
Can the Fed permanently increase the level of aggregate output? Why is the inflation rate high in the long run if the central bank cannot commit itself?
What is a naive forecast of inflation? How do we know that the Phillips curve does not help in forecasting inflation?
That is, the private sector's expected inflation rate is what the inflation rate was last period.
Suppose that the private sector believes the central bank announcement. What are the effects on the inflation rate and real output?
Plot the inflation rate for 1970-1990, and the percentage growth rate in real GDP over the same period.