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What is the level of aggregate spending in Pandora according to the quantity theory of money? What is the effect on the velocity of money?
Assume that you are interested in earning some return on idle balances you. Comment on the effect of your action (everything else the same) on M1 and M2.
Most of the time it is quite difficult to separate the three functions of money. Identify which function of money is emphasized.
What is hyperinflation? What has been the main cause of hyperinflation episodes? What are the costs of anticipated and unanticipated inflation?
How is the quantity theory of money converted into a theory of inflation? According to this theory, what determines the inflation rate?
Describe the three primary functions money performs in an economy. What are the M1 and M2 monetary aggregates?
Assuming the United States is a large open economy, explain how a decrease in investment will affect equilibrium world interest rate and the U.S. trade surplus.
How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows.
What would be the effect of an autonomous decrease in investment on the trade balance?
Calculate Japan's investment if net exports are 1% of GDP. Calculate Japan's exports if imports are valued at $650 billion.
Calculate India's output growth for 2009. What is the contribution of productivity growth to total output growth (in percentage terms)?
What are the four basic results of the Solow growth model? What is the model's chief weakness?
What are the two determinants of the steadystate level of capital per worker? Why does capital per worker move to this steady-state level?
In the per worker production function, what determines level of output per worker? Which one of these factors does Solow growth model consider to be exogenous?
Using the money multiplier model, describe how banks' behavior affected the excess reserves ratio, the money multiplier and the money supply during this period.
Discuss what would be the effect on the monetary base and the money supply of an increase in discount loans that are kept in the form of excess reserves?
The Federal Reserve announced reduction of many lending facilities originally created. What would be the effect of the closing of the TAF on the monetary base?
What would be the effect of a rumor about a banking crisis on checkable deposits in such a country? What would be the effect on reserves and the monetary base?
Use the Fed and the banking system T-accounts to describe effects of a Fed sale. What would be the effect of this transaction on the Fed's monetary liabilities?
Identify the five factors that determine the money supply. For each factor, explain which player in the money supply process-the Federal Reserve and depositors.
What is the monetary base? How does the Federal Reserve influence its size? What are the two basic assumptions of the simple model you have described?
Calculate Alex's real after tax capital gain if the tax is applied to his nominal capital gain.
Comment on the consequences that a financial crisis will have on unemployment and economic growth.
What would be the effect on economic growth? How do you think a civil war affects incentives to invest in that country?
As a consequence, real GDP declined or remained constant during the 1980s. Comment on the relationship between budget deficits, inflation, and real GDP growth.