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An oil cartel effectively increases the price of oil by 100 percent, leading to an adverse supply shock in both Country A and Country B. Both countries were in long-run equilibrium at the same level of output and prices at the time of the shock. The central bank of Country A takes no stabilizing-policy actions. After the short-run impacts of the adverse supply shock become apparent, the central bank of Country B increases the money supply to return the economy to full employment.
a. Describe the short-run impact of the adverse supply shock on prices and output in each country.
b. Compare the long-run impact of the adverse supply shock on prices and output in each country.
while average labor productivity increases at the same rate as it did during 1960-2009. Under this scenario, what would be the net change in real GDP per person between 2009 and 2058?
Elucidate how the equilibrium quantity for the representative firm on the same graph.
If these economists ignore the possibility of crowding out, illustrate what would they estimate the marginal propensity to consume (MPC) to be.
How much profit does the monopolist earn? How much consumer surplus is left? (if any) Calculate the social welfare loss.
For each of the next 7 years, he received total dividends of $50 per year. For the remaining period, he received total dividends of $100 per year. What rate of return did he make on the investment?
Why does the assumption of independence of risks matter in the examples of insurance.
This graphing calculator illustrates the demand for spaghetti dinners served in all the restaurants in a society.
Explain how will this affect wages and number of workers in home construction. How will this affect the cost of building a home.
Illustrate what mix of central bank bond purchases also higher government spending is required to rise income by $6,000 without changing the interest rate
its balance related earnings sheet showed $780 million of retained earnings. What were the total dividends paid to shareholders during the most recent year?
Explain how will this event affect the equilibrium price and quantity of Florida oranges.
Explain how labor market equilibrium is affected by the supply also demand of labor.
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