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a. Using an aggregate-demand/aggregate-supply diagram, depict the current state of the economy. b. If real GDP is now 1 percent below last year's value, how does the unemployment rate compare with l
According to Okun’s Law, what is the current unemployment rate, if the natural rate of unemployment = 7% and full-employment GDP = 12,766?
Problem 1) Explain and show graphically how each of the following changes would affect the shape of the AD curve: 1) Taxes are reduced 2) Nominal money supply increases
How can federal government spending crowd out private sector investment and consumption? Does the exent of crowding out depend on whether or not government spending is financed by taxes, selling Tre
Students should research the definitions of the following economic terms: economics, supply, demand, macroeconomics, microeconomics, elasticity, inelasticity, and gross national product.
What good is economic theory if it cannot predict an individual's behavior? Give examples of the use of economic theory.
The total number of unemployed people was 8,590,000. From this information, explain how to calculate the following and calculate the rates for December 2002: a. Labor force participation rate b. Une
Distinguish between two sources of inflation. Explain why steady inflation is likely to be less harmful to an economy than a situation which inflation rates vary alot.
Use the insights of the classical and Keynesian views of wages and unemployment to explain the differences in unemployment rates between the United States and Western European countries.
Question 1. Does either country have an absolute advantage? Question 2. Which country has a comparative advantage in technology and by what amount.
Explain the difference between the government purchases multiplier and the net tax multiplier. If the MPC falls, what happens to the tax multiplier?
Problem: Who has the responsibility to reduce or eliminate unemployment? What is the role of business? What is the role of government?
1) What will be the free market wage rate and employment level? 2) Suppose the government sets a $5.00 per hour minimum wage. What will be the employment level?
What determines the real interest rate, saving and investment in the Classical model? What impact does a change in the quantity of money have on the interest rate?
Use the marginal productivity theory of labor demand to predict the impact on the firm's employment level of the following events. Explain why the change in employment occurs and show it in a graph.
For an economy at full employment, an increase in the quantity of money will lead to which of the following sequence of shifts in aggregate demand and supply curves
Assuming capital is constant, with 3 machines and MPPK/MRCK = 30, what is the least cost input combo of labor and capital? How much output is produced?
Contrast and discuss capitalism's and socialism's solutions to the three economic problems (what, how & for whom to produce).
Assume that the consumer's initial wealth is zero instead of 300. Repeat part (a). Does being borrowing-constrained mean that consumption is lower in all three periods of the consumer's life than it
Contrast the structural-change and managerial-opposition hypothesis as they relate to the decline in unionism. Which view do you think is more convincing?
Desired consumption and investment are C^d = 4000 – 4000r +0.20 Y; I^d = 2400 – 4000r. As usual, Y is output and r is the real interest rate. Government purchases, G, are 2000. a) Find an
Problem: If the government increased its expenditures and reduced taxes, how would this policy affect the real output and the price level in the short run if the economy is:
In each of the following scenarios, predict what will happen to: 1) Employment, 2) real wages, 3) output, 4) the interest rate, and 5) the price level
Use the IS-LM model to determine the effects of each of the following on the general equilibrium values of the real wage, employment, output, real interest rate, consumption, investment, and price l
Price ceilings or price controls have the effect of A) decreasing quantity supplied and increasing quantity demanded. B) decreasing both quantity supplied and quantity demanded. C) increasing quantity