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Banking and inflation
How does the Federal Reserve control the monetary system?
o How do banks increase the money supply?
o How is inflation measured?
o What are the causes of inflation?
o Are natural disasters causes of inflation or deflation? Where might the public see the evidence?
o What are the costs of inflation?
o Why is inflation so widely feared?
Assuming the phone company has to charge the same monthly rental fee and unit price to all its customers, at what level should it set these charges?
Discuss the difference among inflationary gap and deflationary gap.
Describe the idea of trade offs cost also benefit analysis when answering the above question.
Problem - Income Elasticity of Demand, Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5
Briefly discuss and illustrate the circumstances under which the minimum wage would (1) not lead to unemployement, amd (2) not cause a reduction in the total earnings of low-wage workers who are still employed.
What is business cycle? Describe the four phases of the business cycle. Where on the business cycle do you think the U.S. economy is today?
Elucidate what was the actual price elasticity before the cartel was formed.
Assume that an engineer is deciding either not to move to northern Virginia or remain at his current job in Milwaukee.
Elucidate the policy which change, you would recommend also how this change would be financed.
Assume that a chair manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed following levels of production corresponding to different numbers of workers:
Assume that a employee's skills can be summarized by the number of efficiency units she owns and the distribution of efficiency units in the population
Describe the effects of monetary policies on the economy's production and employment.
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