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1. Describe how the circular-flow diagram works.
2. Name the parts of the diagram that correspond to the flow of goods and services if you were to pay $50 for a new pair of shoes at a local shop.
3. Name the parts of the circular-flow diagram that correspond to the flow of dollars for your $50 pair of shoes.
4. Using the circular-flow diagram, explain how your purchase of the $50 new shoes is helping the business from which you bought them make decisions.
5. Describe how businesses use the production possibilities frontier to make decisions.
There has been extensive discussion of the "wealth effect." The argument goes that inflated stock values were partially responsible for the strong U.S. economy of the 1990's. Explain this linkage in words and then illustrate with an Aggregate Demand/..
We often speak of how price ration goods. What are other rationing measures in clinics in which free care is provided?
The spot price of oil is $110 per barrel and the cost of storing a barrel of oil for one year is $3.25, payable at the end of the year. The risk-free interest rate is 6% per annum, continuously compounded. What is an upper bound for the one-year futu..
There are two types of coal mines in operation: “above-ground” mines, which involve very little risk to the miners, and underground mines, which are considerably more dangerous. What would be an economist’s estimate of the value of a statistical lif..
Given our still currently high unemployment rate (by historical standards) and low inflation rate, argue "for or against" a Supply-Side policy focus versus a Demand-Side policy emphasis.
Bessimer Electronics manufactures addressable actuators in one of its Maquiladora plants in Mexico. The company believes that by investing $24,000 each year in years 1, 2, and 3, it will avoid spending $87,360 in year 3. If the company does make the ..
What is an innovation economy? How does it differ from a traditional manufacturing economy?
In 2020, Ahmed decides to invest in a wind turbine that would produce and sell electricity to the local electric utility. He decides to buy a smaller, used turbine.
why do land cost tend to fluctuate in a free market and why taxes on land are often regarded as preferable to taxes on other factors. 700 words
What policy rule do monetarists believe the Fed should follow? What are the major assumptions underlying this policy prescription? What average annual inflation rate would a monetarist expect if the Fed maintained a growth rate of M2 = 10% per year f..
An outright purchase of $20,000 now (a lump sum payment) can be traded for 24 equal payments of $941.47 per month, starting one month from now. What is the monthly interest rate that establishes equivalence between these two payment plans?
Run a multiple regression that has the maintenance cost as the dependent variable and the age, miles per month, and Gasoline dummy variable as independent variables.
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