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Q1. The standard of living for the poorest third of the world is falling behind the standard for the rest of the world also is not improving very quickly. Aside from those listed in the text, illustrate what are some other factors that might influence the economic status of such countries? Illustrate what measures could be taken to improve these situations?
Q2. Consider the general equilibrium model on local public goods that we discussed in class. We found that the optimal population size is reached whenever f '(N) = X where f '(N) is the marginal product of the last person who immigrates; also X is this person's consumption of the private good. Briefly explain the intuition behind this equation.
The rate that does aggregate output, aggregate investment, aggregate consumption as well as per- capita income grow in this steady state.
The social security system levies a tax on workers and pays benefits to the elderly. Suppose that Congress increases both the tax and benefit.
Suppose that all the necessary conditions exist for the realization of equal wage rates in every market of labor.
Compute the new equilibrium wage and the new number of jobs. Will the number of jobs increase or decrease.
Illustrate what is the Accord's perceived relative advantage with respect to reliability.
Discuss the pros and cons of annuities when compared with other financial instruments and whether they provide a better investment opportunity for some people.
On the same day, the San Francisco Chronicle had an article with the headline "Sharp Drop in Bay Area Home Sales"
Does the aggregate demand-aggregate supply model support Bernanke's thesis.
Over Illustrate range will changes in marginal cost have no effect on CDW's profit-maximizing level of output.
What can you say about the level of the real interest rate if people instead are risk averse.
If one draws MC curves pre and post innovation as well as the Marginal Revenue line for a monopoly and the MR in a competitive situation.
The university is seeking a grant to cover capital costs. How big of a grant would make this project worthwhile (to the university).
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