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1- In the country of Wiknam, the velocity of money is constant. Real GDP grows by 5 percent per year, the money stock grows by 14 percent per year, and the nominal interest rate is 11 percent. What is the real interest rate?
2- Briefly explain the meaning of "the full-crowding out" and "the neutrality of money" in the Classical model. What do they imply about the effectiveness of government policies to improve the economic performance of a country?
Assess the degree of difficulty associated with measuring marginal revenue product for each of the following occupations.
Explain the concept of externality. What does it have to do with the efficient allocation of resources?
Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.
What is your economic cost of buying a ticket? What is your economic cost of attending the game (once you already bought the ticket)?
Find the optimal (profit maximizing or cost minimizing) output of each firm. Find the price that each firm charges at the when producing the optimal output.
Explain International Monetary System
Why might the existing firms in a cartelized industry prefer to be regulated by the government? What is the problem with common property resources?
Compute total revenue, marginal revenue, total cost and profit at each quantity. What quantity would a profit-maximizing publisher choose? What price would it charge?
Determine the profit-maximizing prices both firms will charge. In addition, calculate the price-cost margin for each firm and indicate which has more pricing power and why.
What is the profit-maximizing price and output? What is the total profit? What is the price elasticity of demand at the profit maximizing output?
Consider economy that is above full-employment equilibrium (natural rate of output) because of an increase in AD. Prices of productive resources have'nt changed. With the help of graph
What will be the effect of this change in policy on both the real and the nominal interest rate in the long - run?
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