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Robert Lucas said that "...business cycles are all alike', yet from Chapter 3, we see that the times series of deviations from trend in real GDP is "choppy", and there is no regularity in either the amplitude or frequency of fluctuations in real GDP about trend. What did Lucas mean by this statement?
Calculate the total differential of Q. For the next three questions the answer should be a number is the other good a complementary good or a substitute good also Explain why.
A U.S. government bond matures in 10 years. Its quoted price is now 96.4, which means the buyer will pay $96.40 per $100 of the bond’s face value. The bond pays 5% interest on its face value each year. If $10,000 (the face value) worth of these bonds..
Name and discuss the four major theories that address the term structure of interest rates. In your discussion, indicate the strengths and weaknesses of each of the theories and which theory or theories appear to be the best accepted as explanations ..
Adam Sandler has a utility function U(C,L)=C^1/2L^1/2. The wages now available to him are $9/hour and non wage incomes in royalties are $6/day. Find the MUL and the MUC. Find the MRS for leisure to consumption to find the optimal ratio of leisure to ..
Consider a Stackelberg competition with one leader and one follower. All products produced by the firms are homogeneous. Consider a Stackelberg competition with one leader and one follower. Determine the equilibrium price, and the quantity produced b..
Suppose a firm finds that the marginal product of capital is 60 and the marginal product of labor is 20. If the price of capital is $6 and the price of labor is $2.50, describe how the firm should adjust its mix of capital and labor? What will be the..
What would be the resulting effect on equilibrium price level? Explain. What will be the effect of the different tools of fiscal policy to stabilize the economy?
Explain how more would cumulative spending increase as a result.
Explain gambling from a risk-return perspective and from a Christian worldview. What is wrong (from a Biblical viewpoint) with gambling if consumers want it? Is price-discrimination always wrong? Under what conditions might it be ethically allowable?
With the help of appropriate figure, explain the conditions for Pareto efficiency. Show how the Utility Possibility frontier (UPF) can be derived from the Pareto efficient allocations.
What is the quantity that maximizes profit? What is the revenue and profit at that point? What is the quantity that maximizes revenue? What is the revenue and profit at that point?
Distinguish between ethical rights and obligations from the perspective of accountants and auditors
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