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Some politicians in the US would like to see steps taken towards reducing the country's twin deficit, i.e. a budget and trade deficit. To this end, two famous economists propose two different policies: (i) a fiscal policy focus on decreasing the budget deficit directly, (ii) a monetary policy focus on increasing the real money supply, i.e. a decrease in the price level due to the combined effect of the nominal money supply remaining unchanged and productivity gains in the economy. Explain the market for loanable funds (LF) in an open economy, the market for foreign currency exchange (FCE) and the LF-FCE transmission mechanism that links the LF and FCE markets. Use the corresponding models and the interest rate and exchange rate effects to evaluate the respective effects of the two proposed policies in view of the US politicians' goal of reducing the country's twin deficit and make well-argued policy recommendations.
Roger spends all of his money on racquetballs and food. What would happen to Roger's budget line if his income increased by 10 percent, holding prices constant a)it would shift inward b)it would pivot about the axis for foodc)it would pivot about t..
the law of demand states that the demand for a product is inversely related to the price of such product. therefore the
The Wozniak Corporation, a maker of aircraft engines, determines that in 2008 the demand curve for its product is as follows-What is the price elasticity of demand if price equals $500?
1) What is the probability that a microprocessor will have 0 imperfections 2) What is the probability that a microprocessor will have more than 2 imperfections 3) Out of the 100 microprocessors on the sheet, how many would you expect to have more tha..
Economists consider which of the following costs to be irrelevant to a short-run business decision? In economic analysis, any amount of profit earned above zero is considered above normal because,
Definitions of externality and public goods, Source of inefficiency under externalities and public good, find the socially optimum output if there is negative externality and suggest policies to attain this social optimum. Be able to discuss why s..
To what peak if anyone does Wal-mart feel itself affected by Federal tax policy
Choose one best practice from an organization or management that you are familiar with, and then whether that best practice can be implemented into the culture of a governmental entity and how it can improve service delivery to its citizens.
All firms in a Cournot monopolistically competitive industry have the same cost function C(q) = 25 +10q. Calculate the equilibrium price, firm output, total output and number of firms in the industry.
The high employment deficit is estimated at $100 billion. Suppose that the ecomony is operating below full employment and that it will not overheat during year,
Can you explain why two variables with a moderate or strong linear correlation does not prove causation by giving an example of two moderately or strongly correlated variables that do not have a causal link. This example can be purely be qualitative ..
At which level of initial wealth will he be indifferent among taking on the risk of getting no income and buying the insurance that removes the risk.
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