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What happened to these two deficits in the 1990s? What has happened to them during the past five years?
What is the current unemployment rate in the United States? What is the current rate of inflation?
In the absence of any price controls, what would you predict will happen to drug prices in the United States? in Canada?
David Ricardo illustrated the principle of comparative advantage in terms. Now describe a new production plan, with trade, that can benefit both countries.
How is it possible that while there are gains to free trade, some groups are harmed? Which are the groups in the US that are most adversely affected?
Why can a country with an absolute disadvantage in a product have a comparative advantage in that product? Explain.
What are the advantages of using taxes on polluting rather than subsidies for pollution-abatement equipment?
Why will a free market produce too much of goods that have negative externalities, like pollution?
Since most customers at such restaurants will not return, does the restaurant have an incentive to develop a reputation for good food?
Explain what a tit-for-tat strategy would be. Is a promise to match any available price a way for one firm to signal that it is playing tit for tat? Explain.
Explain how such a device could serve as a credible threat to deter a U.S. attack. In the movie, the Soviet Union did not inform the United States.
Why does the aggregate demand curve slope down? Give real-world examples of the three effects that explain the slope of the curve.
Define each of the six indicator for starbucks (interest rate, housing starts, auto sales, foreign exchange rate, producer price index, and oil and fuel prices)
The topics of macroeconomics--inflation, unemployment, interest rates, and exchange rates--are the subject of newspaper headlines & television stories everyday.
Explain whether you agree or disagree with following. a) A nation's currency will depreciate if its inflation rate is less than that of its trading partners.
Why would anybody buy the Treasury Bond with a negative yield to maturity? How is this possible?
What is an opportunity cost? How is this concept used in TVM analysis, and where is it shown on a time line? Is a single number used in all situations? Explain.
What is the impact of a 10 percent increase in the price of oil on the quantity of oil demanded? What happens to total expenditures?
In 1990, the U.S. government imposed 10 percent tax on certain luxuries such as pleasure boats. What does this imply about the size of the elasticity of demand?
You are asked to propose a strategy to bring the economy out of recession.
Question 1: Provide an explanation of GDP, unemployment, and inflation as measures of economic activity.
You also know that currency appreciation improves the prospects of foreign investments which will likely increase GDP.
Compute Nominal GDP for 2006, 2007, and 2008? Show ALL work. What is Real GDP for 2006, 2007, and 2008? Show ALL work.
What is nominal GDP? What is real GDP? What is included in each? Why are these measures important?
If price level is unchanged, what effect will a monetary policy that is contractionary have on the real income level and private placement balance of a country.