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The inflation rate
Question a
The opportunity cost of an investment is the real interest rate, and that's why investment demand depends on the the real interest rate. The effect of inflation "cancels out" because, although it increases the cost of borrowing funds, it also increases the value of the capital goods in which the funds were invested, which grow at the rate of inflation
If the government starts welfare policy which pays B to all non workers and 0 to all workers, at what value of B will Mike opt out of the labor force and go on welfare?
Currently, the extent of our economic difficulties has caused the economic policymakers to choose fiscal and monetary policies that are both expansionary.
Would your answer change if you thought different German also Japanese policies may facilitate different US policies.
If the elasticity of US exports with respect to the real exchange rate is very low, will this increase in private saving have a large or small effect on the U.S. real exchange rate
The cenima manager observes that the increase in price causes attendance at a given movie to fall from 300 persons to 200 persons.
According to the Heckscher-Ohlin theorem, is Russia capital abundant or labor abundant? Briefly explain. What is the impact of opening trade on the real wage in Russia? Briefly explain.
Use aggregate demand (AD) and aggregate supply (AS) model in which the short run aggregate supply curve slopes upwards to illustrate the equilibrium level of real GDP and prices if the economy is operating:
If I told you that GDP was forecast to rise by a bit more than 3% over the next year, what would that mean to you? What should you be asking about the forecast?
Illustrate the steps comprised in pricing the television units in order to maximize total revenue.
Find the optimal level of inputs L* and K* that minimize the cost of producing Q0. What is the cost of production associated to L* and K*?
Atlantis is a small, isolated island in the South Atlantic. The inhabitants grow potatoes and catch fresh fish. The accompanying table shows the maximum annual output combinations of potatoes and fish that can be produced.
Explain how will different cultural perspectives of a region impact your global business operations.
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