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Q. Governments often complain about one another's macroeconomic policies. This question asks you to analyze one example.
a) During the late-1980s depreciation of the dollar, the United States pressured Germany to lower its interest rate. Explain why the United States might have wanted the German interest rate to be lower (that is, what would the likely effects on the U.S. economy be?). Be sure to include an appropriate graph with your explanation.
b) Germany sometimes responded to U.S. pressure by telling the United States to raise its own interest rate. Might the United States have achieved the same result from raising its own interest rate that it hoped to achieve from Germany lowering its? Compare the effects of the two policies, based on the models developed so far in the text. Why might the United States have preferred one policy over another?
In an effort to provide tax relief for households while still balancing the budget, Congress votes to raise business taxes and decrease personal taxes.
When would it make sense for a factory that is losing money to remain in operation
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Assuming labour demand is downward sloping and that the labour market is competitive, what happens to national income as a result in immigration.
Assuming no other changes, if balances in money market deposit accounts increase by $50 billion and small-denominated time deposits decrease by $50 billion.
the mainstream theory of the business cycle, is the most common source of reciession: a decrease in aggregate demand, a decrease in aggregate supply, or both.
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Find Equilibrium GDP (Y). If potential GDP is 1950, is the economy in a recessionary or inflationary gap. Suppose that the MPC, falls to 0.75, so C = 0.85DI. Find Equilibrium GDP.
In a typical day the store sells some of each type of cola, which suggests that Major League Baseball has adopted FOA because it fears that regular binding arbitration is addictive.
Hiro Nakamura is CEO of the Cola King Bottling Company, a small regional producer operating in the Pacific Northwest. Nakamura is considering two alternative expansion proposals
What steps can a government take to ensure that sustainable development is always considered in assessing which major economic projects or investment proposals to accept.
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