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1. "The aggregate demand curve slopes decrease, because when the price level is reduce, people can afford to purchase more, and aggregate demand increase. When prices rise, people can afford to buy less, and aggregate demand falls." Is this a good explanation of the shape of the AD curve? Why or why not?
2. By using aggregate supply and aggregate demand curves to illustrate, describe the effects of the following events on the price level and on equilibrium GDP in the long run, assuming that input prices fully adjust to output prices after some lag:
[a] An increase occurs in the money supply above potential GDP.
[b] A decrease in government spending and in the money supply with GDP above potential GDP occurs.
[c] Starting with the economy at potential GDP, a war in the Middle East pushes up energy prices temporarily. The Fed expands the money supply to accommodate the inflation.
Prepare a 700-1,400-word paper explaining a company that has made the strategic decision based upon productivity, wages and benefits, and other fixed and variable costs. Examine the decision and its expected outcomes.
Third National Bank is fully loaned up with reserves of $20,000 and demand deposits is similar to $100,000. The reserve ratio is 20 percent.
Evaluate arc price elasticity of demand between prices of $4 and $6 and compute the point price elasticity at the price of $6 state the significance of the coefficients.
Why is a common analysis period necessary in comparing mutually exclusive alternatives by the "Present Worth Method", but is not necessary in the "Equivalent Uniform Annual Cash Flow method"?
Economic costs and benefits for project
Assume that both magazines are owned by the same publishing company that maximizes the combined profits of the magazines. Will the company make the same choice as in the noncooperative game (i.e., owned by different publishing companies)?
Why there is so much advertising in monopolistic competition and oligopoly? How does such advertising help consumers and promote efficiency?
Discuss how the rights of those in the public sector differ from those in the private sector, and how it affects overall public sector productivity.
Write down a paragraph explaining how the Hernandez Corp. finds the least cost combination of inputs for producing the given rate of output.
Suppose the market shares of the six largest firms in the industry are 12 percent each. Compute the six-firm concentration ratio and Herfindahl-Hirschman index for this industry.
Most of us participate in the economy every day. As households, we can provide labor to companies or government in the input market and we are also consumers of goods and services in product market.
What does this decision by Wal-mart tell you regarding the price elasticity of the demand curve that it faces?
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