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Consider a macroeconomic model of an economy in Long Run market equilibrium. Suppose there were a shock which was going to cause a decrease in aggregate demand. a. What steps could a government take in order to avoid the long-run market correction? b. Why would the government want to intervene rather than allow the market to correct itself? c. Why do people oppose government intervening in such ways? d. Why does the government typically only intervene during recessionary periods rather than also in expansionary periods as well?
Illustrate what policy actions have the Federal Reserve taken to confirm that direction.
Explain the effect these vending machines have on the speed of market adjustment. Have you ever wanted to buy a soft-drink on a very hot day, only to find that the vending machines are sold out. How would widespread use of such vending machines af..
Elucidate the importance of competition among firms. Explain whether the competitive environment in this industry benefits society or not.
Explain how the economy affects the success of the auto industry. Economic influences that can affect the industry in a negative way.
Draw a current budget constraint for an assumed single mother (net of child care costs) who loves leisure. Draw the new constraint. Discuss the likely effects on labor force participation and hours of work.
On the same graph, draw the daily budget constraint under The Texas Family Assistance Program for the single parent described above. Find the earnings level at which the earnings subsidy ends. Discuss the effect of the program participation on wor..
If my income increases by 10%, then quantity of public transportation demanded drops by 5%. I can say that income elasticity of my demand for public transportation is negative and that public transportation is a normal good. If the demand for chee..
Assume there are two types of investments, business investments. There is a permanent increase in the nominal supply of money.
A firm, which is the only supplier of a good located in a particular town, is accused of engaging in anticompetitive tactics in order to protect its monopoly position in that town. As part of its defense, the firm has argued that the geographic an..
Describe the position of India with respect to the comparative advantage it holds in gems and jewellery, software services, and petroleum.
When a recession is over, do people begin to immediately feel the effects of an efficient economy? Use the experience of the most recent recession to justify your answer.
Prior to opening his hardware shop Bob worked as an investment banker earning $175,000 each year. He pays his employees $150,000 per year.
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