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What impact would this have on interest rates, the inflow of capital, the current-account deficit, and the foreign exchange value of the dollar?
Discuss Why do economists consider normal returns to capital to be a cost? How does economic profit differ from normal profit?
How does this tax law affect the amount of debt the firm wants to incur, compared to the amount of money it raises by selling equity?
What are implicit costs? Do implicit costs contribute to the opportunity cost of production? Should an implicit cost be counted as cost?
What happens to average product when marginal product is less than average product? At what point does marginal product begin to decrease?
If the firms in a price-taker market are making short-run profits, what will happen to the market price in the long run? Explain.
Why is competition in a market important? Is there positive or negative effect on economy when strong competitive pressures drive various firms out of business?
Why will firms in a price-taker market be able to earn profits in the long run? Why or why not? What determines profitability? Discuss.
Why does the short-run market supply curve for a product slope upward to the right? Why does the long-run market supply curve generally slope upward to right?
How does the role of government influence economic growth? How is the growth rate of real GDP likely to be affected? Explain.
How does economic growth influence living standards of people? Does it really make much difference whether an economy grows at 2 percent or 4 percent annually?
How did integration of expectations into the Phillips curve analysis and rejection of the view that higher inflation will reduce the unemployment rate affect?
What were the major causes of the Great Depression? Did the stock market crash of October 1929 make the Great Depression inevitable?
What is the most important thing the Fed can do to promote economic stability? How will nominal interest rates and the general level of prices be affected?
How does the modern view of the Phillips curve differ from the earlier view?
If the rate of inflation is persistently low, will this help reduce the instability of the business cycle? Why or why not?
What are some of the practical problems that limit the effectiveness of discretionary monetary and fiscal policy as stabilization tools?
Why are the implications of the two theories different in the short run? Are the long-run implications different? Explain.
State in your own words the adaptive-expectations hypothesis. How does the hypothesis of rational expectations differ from that of adaptive expectations?
Describe the key policies and economic arrangements that lessdeveloped countries should follow in order to achieve rapid growth and high income levels.
How would you define economic freedom? Would you expect countries with more economic freedom to grow more rapidly than those with less economic freedom?
How does this influence consumer welfare? Do the GDP growth figures capture the impact of the increased diversity? Why or why not?
What impact do natural resources have on economic growth? Will it be possible for a country with few natural resources to grow rapidly? Why or why not?
When investment is allocated by political decision makers, are innovative ideas likely to be supported? Are unproductive investments likely to be terminated?
What determines whether the new product will be a success or failure? How important is innovation as a source of economic growth? Discuss.