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In his Semi-annual Monetary Policy Report to the Congress of February 14, 2007, then Federal Reserve Chairman Ben Bernanke said: "Another significant factor influencing medium-term trends in inflation is the public's expectations of inflation. These expectations have an important bearing on whether transitory influences on prices, such as those created by changes in energy costs, become embedded in wage and price decisions and so leave a lasting imprint on the rate of inflation. It is encouraging that inflation expectations appear to have remained contained." What did Bernanke mean when he said that the public's expectations of inflation could "become embedded in wage and price decisions"? What would be the effect on the short-run Phillips curve of the public coming to expect a higher inflation rate?
Are these preferences consistent with the lw of diminishing marginal utility
Recently proposed energy legislation has caused concern in West Virginia, particularly in respect to impact on the coal, oil and gas industries.
Suppose there is a temporary but significant increase in oil prices in an economy with an upward-sloping Short-Run Aggregate Supply (SRAS) curve. If policymakers wish to prevent the equilibrium price level from changing in response to the oil price i..
If the economy falls into a recession, the stock's return is projected at a negative 11.6 percent. The probability of a normal economy is 80 percent while the probability of a recession is 20 percent. Illustrate what is the variance of the returns..
Specialty Steel has carefully measured production in its new plant to determine whether it is technically efficient in production.
Katrina's Candies specifically. Distinguish between a change in demand and a change in the quantity demanded (movement along the demand curve).
Suppose that tax and aggregate expenditur income for an economy. Illustrate what is the change in taxes cause by an increase in government spending.
(The Long-Run Industry Supply Curve) A normal good is being produced in a constant-cost, perfectly competitive industry. Initially, each firm is in long-run equilibrium
If a firm has market power but cannot prevent its customers from reselling the product to other customers, the firm will:
Compute the numerical elasticity of long-run demand. Is it unitary, elastic, inelastic, etc. Explain why would consumers demand 0 minutes in the long run if the price was $.30 per minute.
How do restrictive job protection measures affect the demand for unskilled workers? Do they benefit or help the unskilled worker? Explain.
q1. suppose that two economies initially have the same level of real income and both suffer unanticipated declines in
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