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Assume that money demand is highly insensitive to the interest rate. Explain what the effects are on interest and income of an increase in government expenditure (G). Which component(s) of aggregate demand are crowded out (i.e., reduced)? Use an IS-LM diagram to support your answer.
While negotiating the future amount, Wylie notes that he would be willing to take no less than $5,700 if he has to wait a year. What is his TVOM in percent?
Why is fiscal policy slow to affect economic growth? Why does monetary work so much quicker to boost the economy than fiscal policy? Why does fiscal policy often contradict monetary policy and often hinders economic growth during recessionary periods..
The main arguement put forth by advocates of the singlr tax movement was that:
When the nominal rate changed the real rate usually moved in the same direction and that this “is what Taylor’s Principle requires”. Explain why it is that Taylor’s Principle requires that every time a central bank changed the nominal rate it does th..
The inverse demand curve for sugar is P = 100−Q. There are two firms, C and D, who produce sugar. Firms produce sugar using a technology with a cost function characterized by C(Qi) = 20Qi where Qi is the quantity produced by each firm. What is the Be..
A price-taking ?rm selling in a market with a price greater than the ?rm's average total cost should:
Explain price elasticity, income elasticity and cross elasticity of demand. Assess relevance of price elasticity of demand, income elasticity of demand and cross elasticity of demand to a magazine publisher.
Raising tariffs on imported goods in order to reduce our trade deficit with other countries, (i.e. NXUSA
At its current level of production, a profit-maximizing firm in a competitive market receives $12.50 for each unit it produces and faces an average total cost of $10. At the market price of $12.50 per unit, the firm's marginal cost curve crosses the ..
Assume an economy with a total population equal to 1. Individuals can only be employed or unemployed. Suppose this economy’s steady-state unemployment rate is 5%. We know that workers can lose their jobs and become unemployed with probability 4%. Wha..
In a world where the public holds no currency but where banks keep fractional reserves against deposit liabilities, explain how an injection of new base--say from The Fed’s purchase of securities-- lead to new M1 which is a multiple of the new base. ..
q1. assume that the reserve requirement is 25 percent. if a single bank has excess reserves of 500000 explain
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