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The firms and workers in Alpha form expectations adaptively. The firms and workers in Omega form expectations rationally. Their otherwise identical economies are initially in equilibrium at the natural level of output with 10 percent inflation. The central banks of both Alpha and Omega make credible commitments to reduce the growth rates of money until they achieve 2 percent inflation. Compare and contrast the adjustment process to the new equilibrium at the lower rate of inflation in both countries?
Last month, Rick's Bike Shop, Inc. increased the price on the 22-ounce can of Camp A bearing grease by 4.5 percent. In response, sales dropped by 9 percent. A) Calculate the point price elasticity of demand for Camp A bearing grease. B) Calculate t..
Use the following equations for exercises 16-18. C=$100+0.8Y, I=$200, G=$250, X=$100-0.2Y 1. What is the new equilibrium level of real GDP if government spending increases by $150? 2. What is the new equilibrium level of real GDP if government spendi..
When introducing a product to another country or culture you have to be careful to not offend anybody. Things seen here and done here may be offensive elsewhere. Things here may need to be altered slightly to sell and be presentable in other pla..
Suppose a production function is given by f(K;L) = KL 2 What combination of labour and capital minimizes the cost of producing any given output?
Explain how the aggregate expenditure function shifts in response to the changes in each of the following variables:
Do you have frequently ended stock market rallies and led to declines in all major stock indexes.explain why rising oil prices have negatively impacted US equity markets.
A firm, which is the only supplier of a good located in a particular town, is accused of engaging in anticompetitive tactics in order to protect its monopoly position in that town. As part of its defense, the firm has argued that the geographic an..
Suppose that no taxes are imposed, Estimate the equilibrium value of GDP if government expenditures are $50 billion and inteneded investment is $50 billion?
Suppose, on the other hand, that by eectively regulating the nancial system, the bill increases savers' condence in the nancial system. Show the consequences of the policy on this situation on a new graph, again noting changes in the equilibrium i..
Suppose that two years ago, you purchased a Jeep Wrangler SE 4WD with a soft top for $16,500 using five year interest-free financing.
Illustrate what are the production elasticities of demand for labor, capital (trucks) and energy. What type of returns to scale is consistent with the above production function.
Illustrate what are the pros and cons of companies competing in the global environment and how this has affected the U.S. economy and the global economy.
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