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How will aggregate demand and aggregate supply in United States be influenced by these two factors? Using the AD-AS model, explain expected impact on output.
What real rate of return will you earn? If the inflation rate during the next five years is 6 percent, what will happen to your real rate of return?
How will the profit margins of businesses be affected? How will the actual rate of unemployment compare with the natural rate of unemployment?
What is the current money interest rate on ten-year government bonds? Is this also the real interest rate? Why or why not?
If the real interest rate in the loanable funds market increases, what will happen to the net inflow of foreign capital? Explain.
Why does the short-run aggregate supply curve slope upward to the right? If the prices of both (a) resources and (b) goods and services increased proportionally
What major factors influence our ability to produce goods and services in the long run? Why is the longrun aggregate supply curve vertical?
In your own words, explain why aggregate demand is inversely related to the price level.
Which countries had the highest and the lowest inflation rates? Which one of the countries had the most inflation during this period?
When external costs are present, what is likely to be the relationship between market output of a good and the output consistent with ideal economic efficiency?
Discuss what are the necessary conditions for economic efficiency? In what four situations might a market fail to achieve ideal economic efficiency?
What if the pollution invades Baker's home and harms her health? Are her property rights violated? Is an externality present? Explain.
Apply the economic efficiency criterion to the role of government. When would a government intervention be considered economically efficient?
Analyze what is the shortsightedness effect? How does the shortsightedness effect influence the efficiency of public-sector action?
Why will efficient projects necessarily be favored by a majority of voters? Explain.
Government action is based on majority rule. In your own words, explain the meaning of this statement. Is the statement true? Why or why not?
Why might even real GDP be a misleading index of changes in output between 1950 and 2003 in the United States?
How will the construction of the plant affect GDP? Suppose the plant generates $100,000 in corporate profits this year.
A large furniture retailer sells $100,000 of household furnishings from inventories built up last year. How does this sale influence GDP?
If nominal GDP increased by 6 percent during a year, while the GDP deflator increased by 4 percent, by how much did real GDP change during the year?
When governments become heavily involved in taxtransfer activities, how will this involvement affect economic efficiency?
What percentage of government income transfer payments go to the poor? Do you think that the political process in general works to the advantage of the poor?
How are grades rationed in your economics class? How does this rationing method influence student behavior?
According to the basic principles of economics, how will the birthrate be affected by policies that reduce the taxes imposed on those with children?
What secondary effects can you see happening as the result of mandating that automobiles have airbags?