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Suppose the economy is at full employment but inflation is viewed as too high. Consider the following two scenarios:
(a) The central bank has great credibility. The central bank announces a policy of disinflation, and the public believes the announcement. Inflationary expectations fall immediately.
(b) The central bank has no credibility. The central bank announces a policy of disinflation but the public is skeptical that the bank will actually follow through with it. The public's inflationary expectations fall only if they see actual inflation coming down. Discuss the likely unemployment consequences of reducing inflation in each of these two scenarios. In which case will the sacrifice ratio (the unemployment cost of reducing inflation) be higher? Explain why.
A friend of yours is considering two cell phone service providers. Provider A charges $120 per month for the service regardless of the number of calls made. Provider B does not have a fixed service fee but instead charges $1 per minute for calls.
What if this person whom he or she is contacting was a family member? Why can some material that would normally be forbidden under the exclusionary rule be used to return a prisoner to prison or jail?
Assuming a 10 percent sales tax is levied on all consumption, complete the following table: Sales Percent ofIncome Consumption Tax Income Paid in Taxes $10,000 $12,000 20,000 18,000 40,000 32,000 80,000 60,000
MPS= 40 with no government and no foreign trade a 10 billion dollar increase in investment will enventually result in an increase in consumption or spending and how much
Marginal Revenue of a Monopolist a. Prove mathematically that marginal revenue is always less than price, P(Q). b. Explain this intuitively as well.You may use a graph to help you. Remember marginal revenue is the money the firm takes in after sell..
The Mineola Corporation hires a consultant to estimate the relationship between its profit and it output. The consultant reports that the relationship is f = -10 - 6Q + 5.5Q2 - 2Q3 + 0.25Q4 a. The consultant says that the firm should set Q equal..
Do you think the introduction to Wilkinson's profile was effective or not and why? Write down your answers in a well developed paragraph of 8-10 sentences.
What are the implications of these trends for managerial decision making in the copper industry?
are incorrect because proper accounting requires inventory be properly valued (valuation assertion) and damaged and obsolete items and proper inventory pricing pertain to the valuation.
What is the new profit maximizing output?
Assume that Bessie decides first. What is the outcome of this advertising game? If there is an advertisers dilemma, how does it differ from the advertisers dilemma discussed earlier in the chapter? How might the dairy industry solve this dilemma? ..
Create a log-linear model using the data as well. What is this function? Use the MWD test to decide which model is more appropriate. Predict output using a standard linear model. What is the function?
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