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If the Fed chooses the money supply at the same time as people are setting wages and prices, so that everyone has the same information about the state of the economy, then monetary policy cannot be used systematically to stabilize output. Hence, a policy of keeping the money supply constant will have the same real effects as the policy of changing the supply of money in response to the state of the economy.
a. Why is the soft drink industry so profitable during the years in this case b. Update the profitability what has happened to Coke and Pepsi in the last five years c. Coke and Pepsi have been the dominant players in this market. Today, what market..
Explain how this tax or subsidy would achieve the socially efficient level of output. Among the various interested parties - the monopoly firm, the monopoly's consumers, and other taxpayers - who would support the policy and who would oppose it?
Compute the cross-price elasticity of demand between goods X and Y at the given prices. What is the own price elasticity of demand at these prices?
Although most of the changes would not take place until later, assume for the purpose of this problem that Social Security benefits were cut today by $100billion per year. explain what the long-run effects would be on real GDP
BP did not own the deepwater horizon platform, but leased it from a company called Transocean. Would BP have paid more attention to safety if it owned,
Determine whether the firm is operating efficiently, given that its objective is to minimize the cost of producing the given level of output. Determine what changes (if any) in the relative proportions of labor and raw materials need to be made to..
A big city just doubled the yearly fee for hot dog push carts that had exclusive rights to a spot just south of big museum of art to $288,000
Think a competitive industry consisting of one hundred identical firms each with the following cost schedule,
In the early 1990's, a study found that moderate daily consumption of red wine reduced the incidence of heart disease in labratory rats. As a result of national press coverage of the report, the demand for red wine increased dramatically. Assume t..
Suppose that you agree with the 16-percent rate of return proposed by the company. What factors need to be considered when setting rates designed to achieve this factor?
The bank issues a letter of credit to one of its corporate clients. What is the immediate impact on the equity ratio? What is the immediate impact on the equity ratio desired by the bank's management?
What is the tax incidence of an excise tax when demand is highly inelastic Highly elastic What effect does the elasticity of supply have on the incidence of an excise tax What is the efficiency loss of a tax
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