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Before breakup of AT&T, the firm charged a price for local telephone services that was roughly one-half of its cost of providing the services. In contrast, it charged almost two times it cost for long distance services. Why do you think AT&T adopted this pricing strategy?
imply a lower standard of living in every of the three nations compared to the situation where they are united into a single new country.
Explain the impacts of an expansionary fiscal policy such as a tax cut on the levels GDP, Consumption, Investment, interest rate and unemployment and price.
Consider the Bertrand model with no product differentiated in which each firm has a positive and fixed sunk cost F and zero marginal cost. What are the equilibrium prices and profits? Illustrate your result on a proper diagram.
Compute the 10-year growth rate forecast utilizing the constant growth model with annual compounding, and the constant growth model with continuous compounding for each occupation.
Compute the path of the economy, that is , calculate real GDP, the price level, the inflation rate and real money stock for each year until GDP I swithin 1% of the potential. (limit calculated values to 10 decimals points)
Briefly discuss and illustrate the circumstances under which the minimum wage would (1) not lead to unemployement, amd (2) not cause a reduction in the total earnings of low-wage workers who are still employed.
Illustrate what effort does the principal want to induce when effort is not observable. Illustrate what is the optimal contract for the principal.
You take $100 that you had kept under your mattress and deposit it into your bank account. If this $100 stays in banking system as reserves and if banks hold reserves equal to 10% of deposits,
Explain how did Lucas contribute to the development of the Keynesian economics. What was his concern with economic growth and development.
Illustrate what is the gain for a nation that results from specialization in the production of products for which there is a comparative advantage.
How would you show what happens with equilibrium income if agents suddenly lose confidence and decide to spend less, even if their income has not changed?
Understanding the International Macroeconomy, According to the Solow growth model, there are two reasons why an increase in total factor productivity leads to an increase in output. What are those two reasons?
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