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If the price measured in a common currency) of a particular basket of goods is 13 percent higher in the U.S than it is in the United Kingdom, which country country's currency is overvalued, according to the theory of purchasing power parity? Explain.
A car manufacturing company adopts a new technology that, ceteris paribus, increases the productivity of capital. At the same time, workers unionize and demand higher wages. Assume that for this firm capital and labor are substitutable. Which of the ..
Why is it that unemployment and inflation work in opposite directions--when one is high the other is low and vice versa? This concept is depicted by the Phillips Curve. Why are unemployment and inflation sometimes referred to as twin problems?
Is the Fed currently pursuing an expansionary, neutral, or contractionary monetary policy? What if any difficulties do you think may be encountered in implementing the current policy.
Suppose there is an increase in the population growth rate. A. Show graphically how this affects the growth rate of both output per capita and total output in the short and long run.
If the logic of classical economics was not at fault for being unable to fix economic problems of the real world, what was in Keynes' opinion? In what publication did Keynes first discuss what would become known as the multiplier? What two criticisms..
A nation suffering from high unemployment would welcome: A: currency appreciation B. A wave of foreign investment C. currency depreciation D. effects of less expensive exports
One commentator suggested he knew the reason for China's success, writing: "On my visits to China I noticed the finished apartments were so poorly made that they will need to be replaced in less than 15-20 years. This is the secret to their economy. ..
In times of a struggling economic situation, determine the key steps that the Federal Reserve should take to help stabilize the economy. Next, explain how your proposed steps will affect money supply, interest rates, inflation rate, aggregate demand,..
(All numbers in the thousands) In May 2015, the civilian non-institutional population was 250,455. The number of employed workers was 148,795. The number of unemployed workers was 8,674. The number not in the labor force is 92,986. What was the unemp..
Experience goods are products or services
Using the model of the money market for the case of the interest rate control, shift the appropriate curve(s) to show the impact of a decrease in the interest rate caused by an expansionary change in monetary policy. Explain fully the changes in mone..
GDP can increase from one year to the next by: Increases in prices while quantities of goods and services are constant. Increases in the quantities of goods and services produced while prices remain constant. Both prices and quantities of goods and s..
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