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You are responsible for economic policymaking in your country. Your desire is to eliminate inflation, keeping prices absolutely stable at P = 100, no matter what happens to output. Currently, the economy is in equilibrium at Q = 3200 (where Q = potential GDP) and P = 100. You can use monetary and fiscal policies to affect aggregate demand but you cannot affect aggregate supply in the short run. How would you respond to the following scenarios?
1. A surprise increase in investment spending2. Catastrophic floods that cause a sharp food price increase3. A productivity decline that reduces potential output4. A deep depression in East Asia that causes a sharp decrease in net exports to the United States
Explain and illustrate how each of these events would affect aggregate demand, aggregate supply, and prices, then explain how you would respond with economic policies.
How many minutes will the average consumer spends travelling to another ATM machine and what is the resulting non-pecuniary price of an ATM transaction?
Questions: : Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month? Explain your choice.
Discuss how do reducing tax policies on electricity and imported luxury cars in short run affect firm revenue, consumer expenditure and government tax revenue?
The main difference between perfect competition and monopolistic competition is, rices under an ideal cartel situation will be equal to
Here is the information you require to answer the question. This information is taken from the graph. So you will require to draw the graph to answer the questions. The best level of output for monopolist in short run is 500 units and is given by p..
Show, using supply and demand analysis, impact on the equilibrium price and quantity of new Hybrid automobiles when following occurs. Using graphs, explain the change in equilibrium price and quantity,
What challenges would face the Greek government if they wanted to undertake fiscal policy to address the problems described in b?
Given the global economy, increase of emerging economic superpowers such as China and India, and challenges to remaining competitive in a global world, do you think that American federalism remains relevant?
Assume that the technology of producing widgets is that every company entering the market has the same total cost curve, as follows; TC=1000+5Q+0.1Q^2
The switch to the use of HFCS from sugar in soft drinks was prompted in large part by its relatively lower price. Assuming a competitive market, what effect would this change have on the equilibrium price and output for soft drinks?
Guaranteeing a price for new capital to the issuing firm.Selling stock over the Internet.Issuing stock and using the proceeds to purchase bonds.
Find the equation of the new demand curve for Chevrolets. Plot the new demand curve, D1 c' and, on the same graph, plot the curve for Chevrolets, D c'. found in 2 (d).
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