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Using the IS/LM/BP model, demonstrate the effect of each of the following changes. Assume that the economy is a small country with perfect capital mobility and a flexible exchange rate.
An increase in the domestic price level
What do you regard as the main weaknesses of the Ricardian or Classical model as an explanation of the trade patterns? Why do you regard them as weaknesses?
According to law of comparative advantage , who should produce wheat and who must produce Cd palyer? Evaluate all relevant opportunity cost.
What is your economic cost of buying a ticket? What is your economic cost of attending the game (once you already bought the ticket)?
Describe what effect a contractionary fiscal policy would've on the price level and real GDP starting from full employment equilibrium.
Calculate the price elasticity of demand for the product below using average values for the prices and quantities in your formula.
Japan has traditionally had an employment system characterized by a "lifetime" employment relationship between employer and employee and salaries that are based on length of service with the employer-starting low
"If every employer hired its best qualified applicants for a job at every opportunity, the phenomenon of black poverty (as distinct from poverty) could be wiped out in ten years." Do you agree/disagree? Comment.
Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.
Price Discrimination: Assume that United Airlines knows that it faces the following demand equations and corresponding marginal revenue equations for its (one-way) SFO to Las Vegas route
Estimate the linear trend in the data, and use it to forecast gasoline sales in the United States in each quarter of 1990.
Credit cards are sometimes discussed as a public problem. In 2001, purchases on credit cards accounted for 21% of consumer spending in America, which has the lowest savings rate of any big country.
Explain the concept of externality. What does it have to do with the efficient allocation of resources?
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