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Q1. BMME5103 2 forgone entrepreneurial income to be $10,000 a year. She used $500,000 in savings that earned 5 percent interest annually to finance the new business. In the first year, the firm earned revenue of $1,500,000. The costs for rent, supplies, and employees' salaries were $1,100,000. What was the accounting profit for the new business? What was the economic profit (or loss)? Explain your calculations for both questions.
Q2. As the economy slipped into recession in 1980 and 1981, the Fed was under enormous pressure to adopt an expansionary monetary policy. Suppose it had begun an expansionary policy early in 1981. What does the text's analysis of the inflation unemployment cycle suggest about how the macroeconomic history of the 1980s might have been changed?
suppose at the current level of labor used the mrp 100 and the mfc 50. to maximize profits the firm shouldadditional
Compute the equilibrium level of income for the open economy aggregate expenditure model.
In national income accounting, an investment is regarded as. Conclude the probability that the annual net cash flows will be negative.
at what interest rate would the person earn interest if the interest was compounded annually? b) if the double declining balance (200% DB) method is used, what is the depreciation amount for year 2?
Illustrate what guesses survive iterated elimination of dominated strategies
Explain how markets in perfect competition differ from markets that are imperfectly competitive. Illustrate what role does firm have in determining market price under each condition.
Write an algebraic formula that gives Mr. Midas' demand for bonds. Illustrate what is the sum of his demand for money and his demand for bonds.
Do you think that competition can be counted on to discipline the industrial business firms of a modern economy?
Illustrate what Monetary strategy Tools should the Federal Reserve use to fight a recession. Describe them thoroughly.
What is inflation? How do interest rates affect inflation? What are the different types of unemployment? Which of these has the most impact on the economy? Explain
Ilustrate what is the marginal propensity to consume (MPC).
How large a tax cut would be needed to achieve the same increase in aggregate demand? Determine one possible combination of government spending increases and tax increases that would accomplish the same goal.
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