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Consumers often identify brand names with quality. Do you think branded products usually are of higher quality than generic products
If the goal of Motorola was to increase total sales revenue (ignoring cost considerations), would it raise or lower its selling price? Why?
Explain how the policies of the government aim to achieve full employment, stable price and economic growth. Support your evaluation with researched evidence.
Using market supply and demand analysis, explain why labor union leaders are strong advocates of raising the minimum wage above the equilibrium wage.
Briefly discuss what effect the $3,000 refinancing cost should have on this couple's investment decision.
Estimate the material cost of a similar fireplace to be built in the year 2008. What assumption did you make?
It is a consequence of our model of (flexible) exchange rate determination. How can we reconcile this fact with our theory?
What is a target-zone arrangement? What are the benefits and costs of participating in one?
What is a wage-price spiral, and how can a devaluation start one? Is it something undesirable? Explain. How can a wage-price spiral be avoided?
Calculate the inflation-adjusted deficit when the national debt is 30 percent of GDP, the inflation rate is 7 percent per annum, and the total budget deficit is
Explain why the government must be overestimating the revenue it will receive from the resulting inflation tax.
What is the fastest growing component of GDP, and why? What is the composition of GDP by percentage?
What does empirical evidence suggest regarding the extent to which people substitute leisure over time?
When will aggregate shocks (shocks to the economy at large, rather than to particular regions or markets) have the strongest effect on output? Explain.
What are the similarities and differences between Mankiw's menu-cost model of aggregate supply and Lucas's imperfect-information one?
What are rational expectations? How do rational expectations differ from perfect foresight? Is monetary policy neutral under both assumptions?
Explain why output can diverge, in the short run, from its full-employment level. To what extent do these models complement or contradict each other?
Explain why the futures prices are not generally equal to the spot price-the price paid today to receive the foreign currency today.
What happens during the period of adjustment from the short to the long run?
What are the short- and long-term volume effects of an exchange depreciation? Does empirical evidence suggest that they are of sufficient size?
What would be the adjustment process along the lines described by the monetary approach to the balance of payments?
Show, too, how sterilization operations are reflected in the central bank's balance sheet.
Assume that there is perfect mobility of capital. How does the imposition of a tariff affect the exchange rate, output, and the current account?
Why Is the importance of spillover effects larger or smaller under flexible exchange rates, as opposed to fixed ones?
Discuss the lures and dangers in exchange market intervention when exchange rates are flexible. Do you think such intervention is a good idea?