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Suppose central bank observes directly aggregate demand shocks or fully anticipates them. Formulate a monetary policy rule that would insulate the economy from aggregate demand shocks. This monetary policy rule would keep inflation at the target rate and GDP at potential (ie. on trend) when an aggregate demand shock hits the economy. Show how it would work in the context of the IS-MP diagram. How would this monetary policy rule depend upon the sensitivity of investment to the real interest rate?
decisions how indusrtry make important decision with so much economical unrest.
Assume that, from an initial consumer equilibrium position, price of good X falls while the price of good Y remains the same.
Illustrate what is the opportunity cost for Italy if they only produce 1 bushel of grapes? What about 1 computer.
Elucidate and distinguish between the concentration ratio and the HHI. What ate the limitations of these measures within the context of the pharmaceutical industry.
Find out the marketplace value of output and household saving. What is the relationship of saving and investment.
Assume that the working age population in Tiny Town is one hundred people. If 25 of these people are not in the labor force,
Maggie's utility function is and her income is $5000. Then her MRS at generic bundle (x1, x2) is 50-0.25x1. Commodity 2 is a composite good, and hence its price is unity.
Discuss the advantages and/or disadvantages of distributing marketable pesticide permits to each farm operating in the watershed equal to 40% of its current level of use of that pesticide, versus simply ordering each farm to reduce pesticide use t..
Is raising agricultural productivity sufficient to improve rural life in LDCs. Illustrate what policies can be designed to transform agricultural development and raise levels of living in rural areas in LDCs.
As consumer surplus is closely related to the supply curve for a product, producer surplus is closely related to the demand curve for a product.
Elucidate how might raise the chance that the employee would retire earlier as compared with the situation where the employee had to pay for his own health insurance.
Illustrate the price elasticity of demand at the equilibrium price and quantity.What is the price elasticity of supply at the equilibrium price and quantity.
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