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1. Given the following predictions for nominal wage increases and productivity growth, state your forecast for inflation (assume this is all the information available to make the forecast).
a. Nominal wages will increase 10%. Productivity will rise 6%.3
b. Nominal wages will increase 3%. Productivity will increase 3%.
c. Nominal wages will increase 4%. Productivity will increase 5%.
d. Nominal wages will increase 2%. Productivity will fall 1%.
2. State the equation of exchange. What three assumptions convert this equation into the quantity theory of money?
In which of the following circumstances is expansionary fiscal policy more likely to lead to a short-run increase in investment? Explain?
Give the before-tax charcoal price and quantity exchanged. Give the after-tax charcoal price to buyers, the quantity exchanged, and total tax revenues.
Answer the next three questions on the basis of the following production possibilies data for Francia and Galacia. All data are in tons.
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?
Suppose that all other banks hold only the required amount of reserves. If Nan Bank Inc. decides to reduce its reserves to only the required amount, by how much would the economy's money supply increase?
Pam, having recently graduated from college, is looking to work for 2 years before she enters graduate school. She has received 2 job offers with the following salary structures:
Suppose that a perfectly equal distribution of income existed in Disneyland. Which of the reccent residents would have the same income he or she has in present distribution?
Suppose Congress wishes to reduce the budget deficit by reducing government spending. Use the IS-LM model to illustrate graphically.
Discuss at least 3 reasons why and how workers become unemployed (be specific about causes), and also cite 3 reasons unemployed workers finally land new jobs or get rehired.
Currently, the extent of our economic difficulties has caused the economic policymakers to choose fiscal and monetary policies that are both expansionary.
Compute the monopoly equilibrium. Compute the consumer surplus. Assume this firm practices two-parts tariffs, Compute the optimal output.
Suppose the emarginal cost of producing the good in before question is aconstant $ 10 per unit of output . What quantity of output will the firm produce.
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