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1. In an economy with reasonably flexible prices and wages, full employment is almost always maintained. Explain why that statement is true.
2. During the 1980 presidential campaign, Ronald Reagan promised to cut taxes, increase expenditures on national defense, and balance the budget. During the New Hampshire primary of 1980, George Bush called this policy "voodoo economics." The two men were arguing about the relative merits of supply-side economics. Explain their disagreement.
where Q is the quantity demanded of its product, P is the price of its product, Pr is the price of its rival product, and I is per capita disposable income. At present, P=$10, Pr=$20, and I=$6000
Create a time series from the simulated panel. How well can a quadratic adjustment cost model approximate the aggregate investment time series created by the model with nonconvex adjustment costs? Add in variations in the price of new capital into..
A bank is in the process of renegotiating a loan. The principal outstanding is $50 million and is to be paid back in two installments of $25 million each, plus interest of 8 percent.
What is Sam's compensating variation for the proposed policy? Can you compute it without knowing his preferences? Why or why not?
Assume that a hypothetical economy with an MPC of .7 is experiencing severe recession. By how much would government spending have to increase to shift the aggregate demand curve rightward by $30 billion
You obtain the following sample autocorrelations and partial autocorrelations for a sample of 100 observations from actual data:
Do you think developing countries can escape all of the traps described in this chapter? Which ones would be most difficult to escape? How could the developed world be of assistance in these cases? Could developed countries do more?
What does this do to the supply curve of beef? to the equilibrium price of beef?
A city engineer knows that she will need $125 million in 4 years to replace toll booths on a toll road in the city. Traffic on the road is estimated to be 5 million vehicles per year. How much per vehicle should the toll be to cover the cost
Keynes rejected the classical notion of Say's law. He argued that under-spending was very likely. Keynes focused on aggregate demand (total spending) as being the key determinant to the level of macroeconomic activity not aggregate supply which wa..
assume that a national restaurant firm called bbq builds 20 new restaurants at a cost of 1 million per restaurant. it
When writing about the Court, cite at least three cases that illustrate what the Court was thinking
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