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Assume the government imposes an excise tax of $1.4 per unit. What is the amount of tax revenue collected by the government?
a. What is the required reserve for this bank? b. If the Fed changes the required reserve to 10%, what will the change in the money supply equal?
a. What is the y-intercept of the consumption function with respect to aggregate income? b. What is the equilibrium level of income for this economy?
a. In the above example, autonomous consumption equals _______. b. In the above example, the marginal propensity to consume equals _______.
Each entry in the following table gives production information about two economies: Economy X and Economy Y. Assume that both economies have an equal number of hours available for production and eq
Pick one of the short essays you have read in The Accidental Theorist and provide a short summary of its main point(s) and an evaluation of Krugman’s argument.
For the next three questions, calculate the unemployment rate in percentage terms for each of the three cases you are given. Show your work and any formulas used.
What is the opportunity cost of producing one unit of consumer goods in the second economy? Which economy has the comparative advantage in producing capital goods?
Which of the following financial intermediaries is not a depository institution? a. A savings and loan association.b. A commercial bank. c. A credit union. d. A finance company
1) An increase in the excess reserve ratio will cause an increase in the interest rates for Loans. 2) An increase in the required reserve ratio will cause an increase in the funds available to loan ou
Mishkin p. 413. "In what ways can the regional Federal Reserve banks influence the conduct of monetary policy?"
The U.S. banking system evolved in its particular manner due to the haphazard settling of the U.S. frontier and our desire to consolidate financial power.
Comment on the quote of Edward Lazear that “incentives are the essence of economics”. Make sure you show the connection between this statement and what we have been studying:
What is the liquidity effect of an increase in the money supply? The income effect? Price-level effect? Expected-inflation effect?
Suppose the tax rate for the marginal investor is 10%. If the interest rate paid on certificates of deposit is 5.25%, what must the interest rate on municipal bonds be in order for the marginal inve
Compare the classical and expanded AD-AS models on the following grounds: (1) full employment, (2) the importance of AD, (3) the efficacy of monetary policy, (4) the efficacy of fiscal policy, (5) t
“The most likely cause of the instability of the money demand function after 1973 is the rapid pace of financial innovation occurring after 1973”.
What are the components of the monetary base? What are the components of the money multipliers? Critically assess the control of the Fed over the money supply, with respect to the monetary base and
What is the relationship between interest rate risk and maturity? Is the real interest rate as defined by the Fisher equation an accurate measure of the effective cost of borrowing for U.S. individua
Describe what is meant by the terms structural unemployment, frictional unemployment, and seasonal unemployment.
Compute the expected return on these assets and their standard deviations. Comment on which of the two assets should be more valuable.
List the three main components of the Glass-Steagall Act of 1933 and explain why this act was passed.
Describe the bank's balance sheet using a t-account. Compute this bank's net worth ratio and its debt-to-equity ratio.
Conduct a duration analysis for the bank, and show what will happen to the net worth of the bank if interest rates rise by five percentage points. What actions could you take to reduce the bank's in
Calculate the growth rate of real wage per hour between 1992 and 2002 from the following table.