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Assume quantity theory of money holds with constant K and Kf. Suppose Mexico wants to stabilize the exchange rate of its currency with US dollar (dollars/peso).
(1) If Mexico has a real GDP growth rate of 6%, what is the money supply policy Mexico should follow? Explain your answer. (Hint, US money supply grows at 5%)
q.why was firm examining in support of antitrust behavior? categorize some of costs financial and non-financial
Compare and contrast inflation and deflation. What are some of the damaging effects that each has on an economy.
Eastern Airlines offers coach seats on its flight from Milwaukee to New York for $250. Sales have averaged 700 per day during the last year. Eastern’s primary competitor (Continental Airlines) cut their prices from $220 to $200. The quality of travel..
Illustrate what is the minimum product price at which the firm will operate in the short-run. Elucidate how many workers should the firm employ to maximize profits.
In the specific-factors model, an increase in the price of the manufactured good will cause:
Which of the following shifts aggregate demand to the right?
An industrial firm can purchase a special machine for $22,000. A down payment of $2,500 is required, and the balance can be paid in 5 equal year-end-installments at 14% interest on the unpaid balance. As an alternative the machine can be purchased fo..
Explain how would each of these traps impact the production possibilities frontier.
Suppose the National Commerce Bank has just started its operation with $10 million of Capital. On the first day, it receives total checkable deposits of $90million. The bank makes $30 million commercial loans and as safe investment it buys T-bill for..
In a small open economy with a flexible exchange rate, an expansionary fiscal policy will cause which of the following to happen?
Euro zone as a monetary union, takes the most extreme form of a fixed exchange rate. Explain the cost associate with the monetary union and why may it be a bad idea for Europe?
Determine whether each of the following would cause a shift of the aggregate demand curve, a shift of the aggregate supply curve.
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