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Q. "In the early 1980s, new legislation allowed banks to pay interest on checking deposits, which they could not do previously.
a. if we define money to include checking deposits, what effect did this legislation have on money demand? Explain.
b. If the Federal Reserve had maintained a constant money supply in the face of this change, what would have happened to the interest rate? What would have happened to the aggregate demand and aggregate output?
c. If the Federal Reserve had maintained a constant market interest rate (the interest rate on nonmonetary assets) in the face of this change, what change in the money supply would have been necessary? What would have happened to the aggregate demand and aggregate output?"
Austria has a history of strong hostility to nuclear power, and over the last twenty years the Austrians have shut down all of the reactors in Austria
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What happens to total revenue if the price of sugar rises from $3 to $7 per kilogram.
The law of demand states that other things equal
Free zone would happen if the central bank lowered the federal funds rate and buy securities on the open market.
The Wilson Company's marketing manager has determined that the price elasticity of demand for its products equals.
Given the demand and cost conditions, what price, output and profits result in the short run? What will happen as the firm moves from the short to the long run
Under oligopoly if one firm in an industry significantly increases advertising expenditures in order to capture a greater market share, it is most likely that other firms in that industry.
Each station's objective is to maximize its viewing audience, in order to maximize the station advertising revenue.
Solve for steady-state level of captial and output. What savings rate would be necessary to achieve a steady-state output of 150.
If consumption and government purchases go up, what happens to GDP in the long run. Show this graphically.
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