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Question 1
Suppose that the policymakers want to increase the level of output while keeping the interest rate unchanged. What policy or policy mix would you recommend to achieve the above goal?
Using the IS-LM framework, explain clearly why you would recommend it and how it would work.
Question 2
Consider a situation in which a country has suffered from a large negative shock to aggregate demand but at the same time is facing very low interest rate.
a) Explain, using the IS-LM diagrams, the likelihood of restoring the economy through an expansionary monetary policy.
b) Compare the effectiveness of fiscal policy relative to monetary policy in the above context.
Question 3
The Solow growth model is based on the assumption of an exogenous technological progress. We relax this assumption and consider that technological progress is, to a large extent, determined by Research and Development (R&D). Now suppose, the government has increased its expenditure on R&D. Explain the long-run impact of this policy on both growth and living standards.
Discuss the impact of the national debt on the American economy. Use principles and concepts you have learned in this macroeconomics class.
Explain why government regulation is needed, citing the major reasons for government involvement in a market economy and justify the rationale for the intervention of government in the market process in the U.S.
If the Fed's policy continued for several years, what would you expect to eventually happen to the economy? Explain while describing the shifts in aggregate supply and demand.
Two important policy goals of the government and the Fed are to keep unemployment and inflation low, while at the same time making sure that GDP is increasing at an average of 3% per year. It is important to have the right mix of policies and that al..
What are the particular problems associated with the firm represented by the SATC curve shown in the graph? Does it represent a firm that would be able to survive over time?
Suppose an economy with constant state unemployment. the separation rate is 2.5 percent per month and the finding rate is 47.5 percent per month.
Suppose you are an executive director of the top management team of an American multinational.
Some politicians have suggested that the U.S. enact a constitutional amendment requiring that the federal government balance its budget annually. Explain why such an amendment
In a random sample of 99 NBA games, the home team won 57 games. Test the null hypothesis that the home team wins one-half of all games against the alternative that the home team wins a majority of games.
Aside from maximizing profits, assess the factors that managers must consider when making the decision to outsource or integrate forwards or backwards considering which factor would be most influential for decision-making.
How the Unemployment Rate Affects the U.S. Economy and how the Unemployment Rate Affects
You are told to produce a quantity that maximizes profit. How many units do you produce and what is your profit? How many machine and labour hours are used in production?
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