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Question: Analyzing macroeconomic events with the IS curve (I): Consider the following changes in the macroeconomy. Show how to think about them using the IS curve, and explain how and why GDP is affected in the short run.
(a) The Federal Reserve undertakes policy actions that have the effect of lowering the real interest rate below the marginal product of capital.
(b) Consumers become pessimistic about the state of the economy and future productivity growth.
(c) Improvements in information technology increase productivity and therefore increase the marginal product of capital.
Why might deflation be a problem for an economy and why does the paradox of thrift suggest that government needs to intervene in a recession?
Choose a current business article from October or November 2014 (any country) that illustrates market failure (lack of competition or negative externality). Make sure your chosen article is about a market not one company.
How would you recommend positioning the company at the present time to monopolize on current conditions? Would you change that positioning in the near future?
Explain how unemployment impacts each of the following groups: laborers, businesses and government. Based on the article "Rethinking Lays-offs," why is it not always in best interest of companies to cut jobs to save money?
What makes the market of personal computers a good example of perfect competition and what you think are the most important competitive advantages in such a perfectly competitive market?
Find all Nash equilibria in pure strategies and what is the Pareto Optimal outcome under collusion? Show that this outcome is not sustainable.
Consider the mathematical utility function U = 7.1 1y , where U is the utility value corresponding to monetary outcome y. Check that this function is an accurate description of the pharmaceutical company's attitude toward risk. Is the company very..
1. the greatest portion of the budget of state and local governments is spent ona schools.b entitlements such as
Identify and discuss distinct advantages to a monetary union - Provide a written summary of the effects of these changes on the equilibrium interest rate and the equilibrium quantity of bonds.
Build your cost model but calculate labor, equipment depreciation, material, and facility costs separately. Then provide a total cost summary.
Suppose you were a store manager and wanted to increase total revenue for the store by lowering the price of a good. What type of elasticity would have to exist in order for you to be successful
The impact of Alfred Marshall on economics has been profound; write a short biography (1 page) with sources that outlines his contributions to the field.
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