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Part II : True or False ? Give your JUSTIFICATION WHY.
1. Wage indexation is a good mechanism to fight inflation induced by either demand or supply shocks.
2. With high responsiveness of investment to interest rate and low sensitivity of speculative money demand to interest rate, the monetary policy is more efficient than fiscal pol.
3. In the case of adverse supply shocks, the real wage will decrease when the output returns to the full-employment level (4).
An export subsidy has the opposite effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the domestic terms of trade.
A monopoly has demand given through P=20,000-25Q, and costs given through C(Q)=100Q+25Q2. Find the profit maximizing level of price and output.
What are some of the advantages, disadvantages to Replacing the Canadian personal income tax system with consumption tax: benefits and challenges.?
Integrating Problem From the following figure referring to a natural monopolist, indicate(a) the best level of output, price, and profits per unit and in total for the monopolist,(b) the best level of output and price with a lump sum tax that would ..
you are the oil minister of one of 5 key opec countries. the world demand for oil can be reduced to q 100 - p and
The demand curve for a good is very unlikely to be perfectly vertical because A) scarcity and limited income restrict the ability of consumers to afford goods as they become very expensive. B) as the price of a good rises to high enough levels, the ..
For the next three years, measured in today's dollars (real dollars), a family anticipates buying $5,000 worth of groceries each year. Inflation is expected to be three percent per year during this period. The market interest rate is six percent comp..
Explain what is the short-run effect of a fiscal contraction (lower government spending for example)? What happens to the nominal wage rate during the process of moving from short-run equilibrium to long run equilibrium?
on the solow diagram an increase in the saving rate is shown by . a. an upward shift of the depreciation lineb. an
Construct the Coutrnot profit function. Differentiate this function and solve for the reaction functions of firm one and firm two.
1 suppose the market for grass seed can be expressed asdemand qd 100 - 2psupply qs 3pif government imposes a 5
A firm in a purely competitive industry is currently producing 1000 units per day at a total cost of $450 and If the firm produced 800 units per day, its total cost would be $300, and if it produced 500 units per day, its total cost would be $275.
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