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Your employer decides to institute a new compensation scheme next year. They will pay you $25,000 no matter how much you work. However, since they employ nothing but workers who earn at least double the minimum wage, they will cut wages by 50%.
a. Draw this in terms of a budget constraint (what does it look like?).
b. What will this new compensation scheme do in terms of work effort (such as hours worked per year for the company)?
A country that must adopt foreign exchange controls because of a misaligned exchange rate sacrifices the use of both monetary and fiscal policy instruments to influence domestic income and the interest rate.” Explain.
Does Ike feel emotionally neutral since the dollar value of the gain in his stock portfolio exactly offsets the amount of extra taxes he has to pay
Assuming that this is rational behaviour by profit-maximizing "firms" elucidate what economic factors may influence such behaviour.
Under the household production model, the full cost of any activity equals:
Producing a product and/or service has to involve a lot of strategic planning for the producer. It is not logical for a producer to just pick how much they want to produce without analyzing several key figures.
Suppose that price of capital is $1 and price of labor is $2 and total outlay is $16. Write the equation for the iso-cost line and plot it on the same graph with the iso-quants.
Susan's investment portfolio currently contains three stocks that have a total value equal to $100,000. The beta of this portfolio is 1.5. Susan is considering investing an additional $50,000 in stock that has beta equal to 3. After she adds this sto..
Municipal bonds, or munis, The Efficient Market Hypothesis argues that. Which of the following is true regarding the trade offs associated with money? The Efficient Market Hypothesis argues that.
Pareto efficiency is defined as:
Using the IS-LM model, examine what happens in the short run to interest rate, income, consumption, and investment under the following. Support your answer with the appropriate logic and graphs
Explain which fiscal and monetary policies might "activist" Keynesian economists recommend to help a depressed economy regain full employment.
Assume an open, mixed economy (C + I + G + X = real GDP) and an MPS of .2. Explain if it would be expansionary, contractionary, or useless to the economy to increase government expenditures by $50 billion and also increase taxes by $50 billion.
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