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Suppose prices are equal in Europe (in euros) and the US (in dollars) at the end of 2006. In 2007, prices increase by 3% in Europe (in euros) and 1% in the US (in dollars). According to PPP, the euro should appreciate or depreciate? By how much?
For each of the following statements, answer “agree” or “disagree,” and provide justification. “Omitting a relevant variable from a regression model generally causes bias in the OLS estimators.”
Why do developing countries encourage foreign investment? And why do advanced countries promote research and development, while subsidizing these investments?
Suppose the two newspapers merge. Illustrate what is the likely post- merger bargaining outcome.
We say that the consumption bundles that Mei can afford but that do not use up her entire income lie:
The so-called "recognition lag" associated with fiscal policy is a result of how slowly the U.S. Congress moves. The Social Security program is a retirement system where payments to retirees come from their previous contributions. The more progressiv..
Suppose that the long-run aggregate supply curve is positioned at a real GDP level of $15 trillion in base-year dollars, and the long-run equilibrium price level (in index number form) is 115. What is the full-employment level of nominal GDP?
In an effort to reduce their total costs many companies are now replacing paychecks with payroll cards
After college, you worked for an advertising agency creating television commercials for a brand of home living room furniture. Now you've moved to the advertising department of a company that markets furniture designed for hotels and offices. Which o..
What policy rule do monetarists believe the Fed should follow? What are the major assumptions underlying this policy prescription? What average annual inflation rate would a monetarist expect if the Fed maintained a growth rate of M2 = 10% per year f..
Suppose a firm’s technology is represented by the Cobb-Douglas production function F(L, K) = 5LK. The wage rate is $50 and the rental rate of capital is $10. What is the least-cost combination to produce 100 units of output?
Suppose the average annual temperature in the state of New York were to decline for three years in a row. How would that fact affect/contribute to the argument as to whether global warming is occurring and whether we should do something about it?
Why do points on a utility possibility curve represent efficient allocations of resources? Why must the utility possibility curve be downward sloping.
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