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The current inflation rate (in year 0) in an economy is 18% and the current unemployment rate is 6%. The natural rate of unemployment is 6%, the normal (GDP) growth rate is 3%. The coefficients for the Phillips Curve and the Okun's Law are ? ? 1 and ? ? 0.5 respectively. Suppose the central bank wants to begin a process of disinflation in year 1 such that inflation is reduced every year by 3% until it reaches the desired level of 3%. Given this desired path of inflation, calculate the paths of unemployment, output growth rate and nominal money growth for years 1 through 7. Show and explain all your calculations and in particular, explain why does each variable change as they do.
according to exhibitor relations co. in 2006 average movie ticket prices were 6.55 and attendance was 1.4 billion in
What are the major reasons a multinational corporation would engage in Foreign Direct Investment (FDI)? Explain the factors in Michael Porter's "Five Forces Model" which affect the capability of any firm in an industry to earn the profit.
Choose a United States based firm with global operations and discuss the following questions, Discuss the company's activities outside of the U.S.
Residents of your city are charged a fixed weekly fee of $6 for garbage collection. They are allowed to put out as many cans as they wish. The average household disposes of three cans of garbage per week under this plan.
Herbert spends all $50 of hes paycheck on food and shelter which each cost $5 per unit what is the equation of hes budjet line ? Sketh the budjet line and two possiable indifference curves
Financial markets make it possible for those who have saved money to earn a reward by providing the financing for business formation and expansion. Business owners can seek financing through the stock market, the bond market, or the banking sector..
1. use the following to calculate profit at each quantity of output.total output qnbspnbspnbspnbspnbsp price
What is the Marginal Rate of Technical Substitution between labor and capital and what is the least cost method of producing the target level of output
If the government imposes a $1 per-unit tax, how do the marginal, average total, and average variable costs change? What if instead the government imposes a $100 per-firm tax?
Suppose the government decides to increase taxes by $30 billion in order to increase Social Security benefits by the same amount. How will this combined tax-transfer policy affect aggregate demand at current prices
What are the advantages and disadvantages of preventing the federal budget from ever being in deficit. Explain why the high employment deficit or surplus might differ from the actual budget deficit or surplus.
What phase of the business cycle do you believe Spain was in during 2013? Explain why with reference to theory and represent this phase of the business cycle using an aggregate demand and supply model.
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