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Assume a model with a Keynesian aggregate demand curve and an ordinary upward-sloping aggregate supply curve. Using this model, please show the effects of the following events. Describe what happens to the price level and real GDP.
a. deflation.
b. an increase in labor costs due to increases in nominal wages.
c. an increase in household wealth.
d. a decrease in the value of the dollar compared to other currencies.
A purely competitive wheat farmer can sell any wheat he grows for $30 per bushel. His five acres of land show diminishing returns, because some are better of wheat, the second acre 900, the third 800, the fourth 700, the fifth 600
One year ago, you bought a bond for $10,000. You received interest of $400 at the end of the year, as well as your $10,000 principal. If the inflation rate over the last year was five percent, calculate the real return.
Suppose that the federal government's annual budget deficit is $250 billion and that the Fed's holdings of government securities increase by $10 billion over the year. How much of the deficit was monetized
Suppose the demand function for a firm's product is given by In Qdx=3-0.5 In Px-2.5 In Py In M 2 In A Where Px= $10, Py= $4, M= $20,000, A= $250 A. Determine the own price elasticity of demand, and state whether demand is elastic, inelastic, or unita..
Imagine a manufacturing industry that produces 100 million units of compact digital cameras annually in the US market. Suppose the minimum efficient scale (MES) for the production of digital cameras is 10 million units annually.
Executives estimate that they will have gross revenues of $500,000, total costs of 300,000, 30,000 in allowable tax deductions, and a one time business start up credit of 8000. What is taxable income for the first year.
Mr. Smith wishes to sell a bond that has a face value of $1,000.The bond bears an interest rate of 8%,with bond interest payable semiannually. Four years ago, the bond was purchased at $900.
two people live alone in isolated regions, have the same resources, grow potaotes and chickens, if one devotes resources to growing potatoes they raise 200 lbs a year. if they grow chickens they raise 50 a year. if they apportions some resourcs to ..
two world leaders Mack and Nick are engaged in an arms race and face the decision whether or not to build a missile. The payoffs of Mack and Nick are as follows: If both build a missile, both receive the payoff -10. If both do not build a missile, ..
What is the total cost function T C (q)? What is the fixed cost? What is the variable cost? Find the average cost function, the average fixed cost function, the average variable cost function and the marginal cost function. Draw them in two separ..
Second, notice that if z=x/y , then z = x * (1/y). Hence, using the formula mentioned above, g(z)=g(x)+g(1/y). So all you need is find a clever way to calculate the growth rate of the variable 1/y, namely g(1/y).
In a more typical situation, the government does not know the cost of pollution reduction for each firm. If the government decides to reach its overall goal by imposing uniform reductions on the firms, calculate the reduction made by each firm,
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