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1) Explain what effect an expansionary fiscal policy would have on the price level and real GDP starting from full employment equilibrium.
2) Why does a larger government budget deficit increase the magnitude of the crowding-out effect?
3) How does the multiplier work and what might government use it for?
Why might it be difficult for the Fed to formally adopt inflation targeting? Would inflation targeting be a good policy for the Fed in the present economic environment
Explain why competitive markets normally lead profit maximizing firms to make choices about resource use that lead to an "efficient" allocation of resources to the market?
Assume that the soft coal industry is a competitive industry and it is in long run equilibrium. Now assume that the firms in the industry form a cartel.
Consider the problem of the book assuming that the utility is Cobb-Douglas (U (C, l) = C α l β )
In which of the following circumstances is expansionary fiscal policy more likely to lead to a short-run increase in investment? Explain?
What distinguishes money from other assets in the economy? What are demand deposits, and why should they be included in the stock of money?
Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."
You're the absolute czar and head of union of 1,000 plumbers in Austin, Texas. You've the absolute power to set the wage at which the plumbers will work. You wished to achieve full employment at highest possible wage; (b) you wished to maximize the..
Develop an exponential smoothing forecast with smoothing constants α =0.1 and 0.3. What would be the forecast for week 11?
Obtain the market clearing price and quantity. Under the assumption of profit and maximization , how much output should the representative firm produce?
Discuss the relationship between each of the following variables based on the experience of U.S. economy over the past 30 years.
Describe the present economic crisis situation in Europe. Why has it been so difficult for the Europeans to find a solution to this problem? Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..
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