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Keynesian Solutions
1. What is the Keynesian solution to a recession or depression? How does the Keynesian multiplier work?
2. We are slowly coming out of a recession now. What kind of policies were/are proposed to help get us out of this recession? Do these sound like Keynesian polices or Classical ones? Why?
Bush proposed for government expenditures in the case of a recessionary gap? What is the effect of his policies on the federal government budget?
What is the firm's cost function when the cost of pollution certificates is included? What is the firm's marginal cost function when the cost of pollution certificates is included? Derive the firm's supply function.
The Hanover Manufacturing Company believes that the demand curve for its product is P = 5 - Q-Evaluate the wisdom of the firm's pricing policy
Discuss, relating in part whether such highways are public goods and whether or not privatization should work.
Explain what accounts for the Hong Kong Monetary Authority behaving differently than the other central banks in emerging Asia.
Graphically illustrate the impact of an open-market purchase by the Federal Reserve on the equilibrium interest rate using the theory of liquidity preference and the market for real money balances. (Be sure to label:
Short term Treasury bills [3 and 6 month] have current annual rates of interest around 0.5%. Use that info plus your best forecast of inflation to calculate the real rate of interest on those bills.
Describe the effects of monetary policies on the economy's production and employment.
Using the Lerner index, find the price elasticity of demand for Botox and interpret what this value means to total revenue if the price of Botox were increased one percentage point.
Explain in a nontechnical way why demand is elastic in the northwest segment of the demand curve and inelastic in the southeast segment.
Throughout this course we have discussed the 'agency problem' - i.e., when the interests of owners and managers are not properly aligned.
Compute the marginal cost and marginal revenue of each unit of output and enter these figures in the table.
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