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You are the fiscal policy maker of a country which had a closed economy, but which now opens up to the rest of the world. Explain and discuss how opening up the economy will have an impact on your fiscal policy measures.
Which of the following arguments strengthen the idea of floating exchange rates? A. Trade deficits can be corrected through changes in exchange rates. B. Changes in exchange rates will not impact the trade balance in the country. C. Governments shoul..
Suppose the U.S. economy is in a recession and faces relatively high inflation. List the twin problems which policymakers face. List the monetary policy approaches the Fed could take to resolve each problem (i.e, do not list the policy tools—just des..
The marketing manager for Mountain Mist soda needs to decide how many TV spots and magazine ads to run during the next quarter. Each TV spot costs $5000 and is expected to increase sales by 300,000 cans. Each magazine ad costs $2,000 and is expected ..
Why is the New York Federal Reserve president always on the FOMC? Does the committee meet often enough? Should its meetings be closed to the public? Have its recent attempts at greater transparency helped its image? In responding to your classmates’ ..
Differentiated goods are NOT a feature of a:
The factors that cause shifts in supply and the importance of demand are examined. What is the law of supply, and what are the factors that cause shifts in supply? What is the law of demand and why is it important? Why does an increase in the price o..
A single-price monopolist sets price?
Consider the industry for making plastic cups. The process of producing the cups generates pollution. Assume the marginal damage function of pollution is given by MD = 4E, where damages are measured in dollars and E is the level of emissions. Assume ..
A weekly business magazine offers a 1-year subscription for $48 and a 3- year subscription for $116. If you thought you would read the magazine for at least the next 3 years, and consider 20% as a minimum rate of return, which way would you purchase ..
Explain the Mutiplier Effect. Try to explain it in some detail so that someone who did not know anything about economics would be able to gain a fundamental understanding of it. Use a visual aid to help the observer understand the concept.
The monetary base increased by 20% during the contraction of 1929-1933, but the money supply fell by 25%. Explain why this occurred. How can the money supply fall when the base increases?
Are credit cards money? Explain. Why do we accept money as payment? What affects the value of money? What is the purchasing power of dollar? How higher prices affect purchasing power of dollar?
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