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Suppose the Fed's Beige Book reported that "in South Florida, bookings for the summer tourist season were off to a slower start than last year" and that "tourist counts and revenues were down in Hawaii and Las Vegas and at destinations such as golf schools and luxury resorts in the inter-mountain states and along the West Coast."
If this information reflects nationwide consumer choices regarding discretionary income, what would you predict about the future course of Fed policy regarding interest rates?
Would your prediction change if you believed that slower travel activity was the result of higher gasoline or other transportation costs?
Explain how many hours of work is the consumer working. What is her income.
Illustrate what are the effects of the current tax policy on US businesses in the short-run and in the long-run.
As the manager of monopoly, you face potential government regulation. Findout the monopoly price and output.
Illustrate what is the discount rate in the banking system and explain how the Fed manipulates this rate in order to achieve macroeconomic objectives.
Describe the productivity change for every category also then determine the improvement for labor-hours, the typical standard for comparison.
Assume that an engineer is deciding either not to move to northern Virginia or remain at his current job in Milwaukee.
Suppose the Fed does not change the money supply. According to the theory of liquidity preference, what happens to the interest rate? What happens to the aggregate demand.
Elucidate why do you think U.S. investors do not try to capitalize on the high interest rates in Mexico.
Graph the isoquant that these calculations imply. Explain in very clear and complete terms why the isoquant has the shape that you observe.
Explain how changing interest rates will affect investment spending, equilibrium output, and prices. Also, could do a brief discussion of the money multiplier and how it relates to the Fed's activities.
Describe the reliability of the forecasts. Illustrate what do you tell him about these forecasts and their accuracy to help him make his decision.
Decide if the values of the goods produced are included in the 2006 GDP and explain your reasoning.
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