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Q1. Why do proponents of active policy recommend government intervention to close an expansionary gap? Briefly discuss.
Q2. Why might an active policy approach be more politically popular than a passive approach, especially during a recession?
Q3. Some economists argue that only unanticipated increases in the money supply can affect real GDP. Explain why this may be the case.
Q4. What is the policy credibility and how is it relevant to the problem of reducing high inflation? How is credibility related to the time inconsistency problem?
The largest loan that the bank can make on the basis of the new deposit. If the bank chooses to hold reserves of $3,000 on the new deposit, what are the excess reserves on the deposit.
Explain an economy is initially in equilibrium at the natural level. The central bank increases the money supply.
What if the pollution invades Baker's home and harms her health
If one defines incremental cost as the change in total cost resulting from a decision, and incremental revenue as the change in total revenue resulting from a decision, any business decision is profitable.
Why did people believe the difficulties Aisian economies were expericing in 1997-1998
Suppose at the current level of labor used, the MRP = $100 and the MFC = $50. Elucidate the maximize profits
The equilibrium quantity increase or decrease depends on Demand
Why all the balance of payments accounts be in surplus. What factors determine the demand for British pounds in foreign exchange markets.
A pharmaceutical firm faces monthly demands in the U.S. and Mexican markets for one of its patented drugs.
Assume that the industry wants to expand and has to make some long-term capital budgeting decisions. Now the industry is confronted with government regulations to oversee the merger.
Imagine that you were the president of an emerging country that is trying to reduce the number of its imports
Distinguish between the resources market and the product market in the circular flow model.
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