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1. Consider the following description of the real sector of the economy:
Y = C + I + G
C = C0 + mpc x YD
YD = Y - T
T = T0 + tY
I = d - er
G = G0
Answer the following questions by rearrange terms and solve for r in terms of Y. We in fact place r on the vertical axis when we draw the IS-curve.
a. Draw the IS-curve. What is formula for the slope of the IS-curve, Δr/ΔY?
b. If e = 0, draw the investment curve and the IS-curve. What does this imply?
c. How is the slope of the IS-curve affected as e increases?
d. What happens when e = ∞? What does this imply?
A marketplace has only two sellers. Both are trying to decide on a pricing strategy.
1. Evaluate the following statements and discuss whether they are true, false or uncertain. Justify your answers. (i) A monopolist encounters a linear demand curve should always produce at the point where the demand is unit elastic in order to maxi..
What is currency overshooting? Using an example of a permanent decrease in money supply, explain with the help of graphs, how the money market and forex market respond to the change in the short run and in the long run.
You are concerned about two events you recently learned about through trade publications - should you plan to increase or decrease your production of nails? Explain.
The demand function for gadgets is providede by the following formula. Illustrtae what is the point price elasticity of demand.
Discuss and explain perfect competition and long-run equilibrium. Provide detailed descriptions, definitions and concrete examples of your findings.
Many types of systems are networked together, and the number of devices that are added to this network increases every year. You can set your home security alarm system using a smartphone app or use another mobile app to open your car door.
1. Outline some of the dominant patterns of population, output and per capita income growth and/or decline in the world economy, 500-1750, and what factors most fundamentally explain these patterns.
If the costs of one of the goods rise by 5 percent, Illustrate what will happen to the demand for the other product, holding constant the effects of all other factors?
A tool, often used, to determine whether to discontinue a new venture project opportunity is the feasibility analysis.
As the spokesperson for the Environmental Protection Agency, how would you explain the economic reasons for these actions to angry customers of this company who were forced to pay more for the chemicals as a result of this government action.
Do you advocate an active or passive policy approach? Why? Why might an active policy approach be more popular than a passive approach, especially during a recession?
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