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Last year, Pat and Chris occupied separate apartments. Each consumed 400 gallons of hot water monthly. This year, they are sharing an apartment. To their surprise, they find that they are using a total of 1,000 gallons per month between them. Why?
Illustrate graphically the impact in the short run and the long run of a Federal Reserve decision to increase open-market purchases.
You are the manager of 3D Designs-a large company that does graphics work for Disney and other companies. You and your only competitor are contemplating the purchase of a new 3-D imaging device.
What is the inflation rate in Home? In Foreign? What is the rate of change in the nominal exchange rate? Which currency is expected to appreciate? At what rate? Explain.
Explain how a change in investment can have big impact on GDp causing nationwide slump. Recall that investment is "small' relative to the whole economy.
Use the IS/LM model and the IS-PC-MR model to explain what monetary policy to pursue.
Assume that Congress is considering imposing the 30% tariff on imported automobiles. Who would be the gainers and who would be the losers from such move?
Describe the creation of money from excess reserves and multiple deposit expansion in banking system. How does the multiplier affect the supply of money?
What is autarky price and quantity equilibrium for both home and foreign? What is the open trade price and volume under free trade.
How is interest rate described? Why is there a lower present value of goods to be delivered in future? What are their respective interest rates? Illustrate the adjustments which you think will ensue.
If increased government spending and tax cuts were equally effective in stimulating aggregate demand, which fiscal tool would you select? Why?
The demand and supply curves for gasoline (in billions per year) are given below. Using the equations, find the initial equilibrium price and the quantity in the market for gasoline.
The Mor Tex Company assembles Garments by hand even though a textile machine exists that can assemble garments faster than a human.
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