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Imagine Congress passes a constitutional amendment the budget balanced at all times. That is G = T. Does this imply that the government can no longer use fiscal policy to affect employment and output?
If the price of chicken wings drops to $2.00, how many chicken wings should be produced then? Are you making profit above all costs at $2 chicken wings? At what price would be the short-run breakeven point? At what price should the firm shut down?
Demand Pull Inflation: Suppose that the central bank wants to increase output, but the economy is already at the natural rate. Show the short and long run effects of a monetary expansion in this situation in the AD/AS model. You can omit the labor ma..
Mining is proposed for a wilderness area that provides two benefits: recreation (due to backpacking opportunities) and biodiversity (there are endangered wildlife and plants). Which discount rate makes the best case for mining? What is the present va..
Suppose that the government decreases spending by $100 billion. What happens to aggregate demand? What is the likely effect on prices and output? Where are the new equilibrium price level and GDP relative to the old levels?
Assume demand for a medical service is given by the equation P = 1000-2Q. Assume the price without insurance is $100, but insurance reduces the consumer’s out-of-pocket price to $50. How many extra services will be consumed as a result of the out-of-..
Assume the price falls to $ 7.50. What think would be a short-run impact on the production of the company. What would be the long term.
When I'm A GoldMiner chooses what quantity of gold each of it's mines will produce over the next 12 months, this quantity, along with the prices prevailing in the market for output and inputs, will
At the intersection of the short run aggregate supply curve (SAS), the aggregate demand curve (AD), and the long run aggregate supply curve (LAS) all occurring at the same point, the economy is:
Consider two firms, located at each end of a street of length 1. There are customers uniformly distributed along this street. Customers incur transportation costs TC = 2x2, where x is the distance they need to travel in order to purchase the product...
The United States currently has an “opt-in” system for organ donations from the deceased. People must explicitly choose postmortem donation ahead of time (as when they obtain their driver’s license). Many other nations have “opt-out” systems:
The banks hold no excess reserves, Illustrate what will happen to the total money supply. How did you reach your answer.
Suppose the current administration decides to decrease government expenditures as a means to cut the existing government budget deficit. Using a graph of aggregate demand and supply, show what the effect would be in the short run. Describe the effect..
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