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How does a government budget surplus affect the U.S. economy? Identify two periods in recent history in which the United States has run budget surpluses. What were the reasons for the surpluses during those time periods? Original answers please, not copy and paste.
Suppose that in our economy represented by sectors A and T as described in class (A is capital intensive and T is labor intensive; both produce under constant returns to scale), there is a positive production externality (for instance knowledge spill..
Consider an income support program (similar to AFDC after 1967) in which a family with no income would receive $1500 in cash benefits per month, and if the family receives income from working Y, At what income Y would benefits be eliminated? Suppose ..
What is the difference between a change in the quantity supplied and a shift in the supply curve.
Forward premiums and discounts imply that there is risk in foreign exchange transactions. Explain the three types of FX risk? How can foreign exchange rate risk be fully covered or hedged?
Explain briefly how a change to the following MS, MD, or P (ceteris paribus) would shift the LM function to the right. Include in your discussion whether the variable would have to increase or decrease to cause the rightward LM shift. Discuss which o..
Think of some other real-world examples where the competitive hypothesis is violated. What would need to be added to the basic supply and demand model to accurately predict what people do when they aren't sure
Islandia is a completely isolated island that has a fixed stock of 100,000 tons of coal. Islandia will survive for two periods. Consumers in Islandia having a declining marginal benefit of coal consumption in each period. Assume the real interest rat..
A company with 100 employees decides to offer its employees medical insurance administered by a major health company, but funded totally by the employer—i.e., it self-insurance. The CEO is furious with his HR director who told him that, given their h..
One key assumption lying behind the policy irrelevance proposition is that
Economists often use the sum of a nation's exports and imports divided by its overall economic activity as a measure of the nations degree of openness. Explain why a large value for this measure may not always be a good indicator of openness.
In a Monopoly market, a firm is a price maker since there are no close substitutes to the product. You are asked to find the company’s Shut-Down, Break-Even, and Profit-Maximization points. Fixed Costs remains at $1,000.00. Graph the TC and TR on one..
Suppose the model of Supply and Demand is used to make predictions about changes in the equilibrium price and the equilibrium quantity of corn. Suppose above-normal growing conditions (near-perfect weather, ideal soil moisture, no pest infestations,..
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