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The Fed is concerned that this overheated economy will put pressure on prices and lead to a too high level of inflation. For this reason the Fed wants to engage in contradictory monetary policy, reducing AD, and so output, thereby increasing unemployment. What do you expect the Fed will do, sell Treasury bonds or buy Treasury bonds?
Consider a simple economy that produces only pies. The following table contains information on the economy's money supply, velocity of money, price level, and output. For example, in 2011, the money supply was $320, the price of a pie was $8.00, and ..
In 2001, the number of people in the working-age population increased from 212.6 million to 215.1 million, while the labor force increased from 141.5 million to 142.3 million. By how much did the labor-force participation rate change?
From a geographical standpoint, why is space, as in usable area on earth, so integral to the survival of Capitalism as an economic system?
Participate in a discussion with your classmates by describing the role international trade plays in your life. Review the “EYE on YOUR LIFE” caption titled “International Trade” on page 235 in the textbook. As a voter, describe your concerns regardi..
The purpose of this assessment is to understand the concept of full employment and analyze how frictional unemployment affects it. Assessment Description: Based on your understanding of full employment, Provide appropriate rationale to support your r..
When transaction costs are low enough, efficient resource allocation will follow regardless of the particular assignment of property rights. When transaction costs are high enough, efficient resource allocation requires assigning property rights to t..
In recent years, there have been significant increases in US money supply. How does the Federal Reserve "increase" the US money supply in the most active way?
Government increases taxes by 50 billion and increase transfer payments by 50 billion illustrate what would happen to aggregate demand.
Suppose the demand for gasoline is QD = 75 – 25PD and supply is QS = 30 + 20PS, where prices are expressed in dollars per gallon. How does a $0.40 per gallon tax affect the equilibrium price and quantity of gasoline (show both the pre-tax and post ta..
Suppose you are the manager of a golf club with monopoly power. a typical consumer's inverse demand function for your firm's product is P=100-20Q, and your cost function is C(Q)=20Q. a. If you apply a two-part pricing strategy, how much would be the ..
Increasingly, employees are being allowed to choose benefit packages from a menu of items. For instance, workers may be given a package of benefits that includes basic and optional items. How do you think flexible benefit packages would affect an emp..
A 10% increase in the slice of pizza causes a 10% drop in quantity of both pizza and beer. Describe elasticities and the nature of the two products
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