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In the preceding problem, suppose the Federal Reserve announces a policy of printing $100 in new bills every day and giving them to Janet Yellen’s mom.
a) At the moment the Fed announces this policy, what happens to the demand for money?
b) At the moment the Fed announces this policy, what happens to the price level?
c) Is there a deadweight loss? Explain why or why not.
Do you think the price elasticity of demand for Ford sport-utility vehicles (SUVs) will increase, decrease, or remain the same when each of the following events occurs? Explain your answer.
Analyze how prescription drugs affect the demand and supply of other products and services in this country.
Why do many prospective voters choose to watch sports on television rather than watching the news or political roundtables? In your answer, be sure to mention the role played by rational ignorance.
You are in charge of hiring for the sales department of Nature’s Own chemical company. You are choosing between two workers, a “safe” worker who will produce 250 thousand dollars in sales (net of variable costs) in each of the next four years. Set up..
Explain why it might be desirable to have a regressive tax structure, even if the social welfare function is utilitarian, when general equilibrium effects of taxes are taken into account. Would it ever be desirable to impose a negative marginal tax r..
You and your spouse just adopted twin girls, little Heather and Beth. You want to make sure theyare taken care of for the next 22 years. (A)Based on the following information, how much lifeinsurance needs to be purchased for the husband, if any? (B) ..
Fashionable Designs, Ltd., plans to market a new sports blazer. Based on information provided by the accounting department, the company estimates fixed costs of $40,000 per year and average variable costs of: AVC = $1 + $0.001Q, where AVC is average ..
Suppose the production function in an economy is Y = K^0.5L^0.5, where K is the amount of capital and L is the amount of labor. The economy begins with 64 units of capital and 16 units of labor. How much output does the economy produce?
For retirement planning, you decided to deposit $1,000 per month and increase your deposit by $100 per month. How much will you have at the end of 10 years if the bank pays 3% annually, compounded monthly?
What does the principle of horizontal equity state?
Enron will be an example of a dysfunctional company for many years to come. It was clearly a company riddled with fraud also excess
In a perfectly competitive industry, the price of good A is $2. If a firm in this industry decides to increase its price to $2.50, it will: a. realize an increase in profit of $0.50 per unit output. b. lose some of its customers in the market. c. be ..
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