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Write your responses in complete sentences. Your answers to each question should include 2-3 paragraphs (125-250 words).
1. What shape did the short-run aggregate supply curve have during the 1930s, according to Keynes? Explain.
2. What is the multiplier? How is it calculated? Why is the multiplier related only to consumption spending?
3. What are the macroeconomic consequences of a budget deficit when the economy is operating at full employment? Be sure to discuss the effects in the short run and long run.
4. Suppose that the Fed purchases $1 million in bonds in the open market. Explain how the money supply can increase by more than $1 million.
5. What happens to the price of bonds when the Fed sells bonds? What happens to the interest rate? What happens to the money supply?
Explain whether the following government activities is motivated by a concern about equality or a concern about efficiency. In the case of efficiency, discuss the type of market failure involved- regulating cable TV prices.
A consumer lives three periods, called the learning period, the working period, and the retirement period. Her income is 200 during the learning period,
The winners of the Nobel Prize in economic science were recently announced-who were they? For what contribution to our understanding of economics were they recognized?
SAR Publisher is a monopolist in publishing a textbook on Hong Kong economy. Besides the Hong Kong market, SAR Publisher also sells this textbook in United State.
What fiscal policy would you implement and why? Graph and explain the whole situation from start to finish, make up your own numbers. Make up your own MPC from that you will be able to derive the multiplier.
What allows companies to distribute the same prescirption drugfor two different prices? Why dont competitiors undercut theirprice in the Western countries (i.e. United States)?
Myra receives a $20,000 gift from her cousin and inherits $80,000 in corporate bonds from her Aunt. Myra receives $7,000 in interest income from the bonds. How much does Myra include in gross income?
Calculate what level of output this monopolistic competitor should produce if he/she wishes to maximize profits.
What about labour markets Is there any difference between labour and commodities that would make the theory a better representation in one case than the other. Do you feel that theory works for commodities markets in general.
In particular, suppose the US trades Canada half of its production for half of what Canada produces? How many additional shirts will the US have adter the trade? How many additional boots?
What is the inflation rate in Home? In Foreign? What is the rate of change in the nominal exchange rate? Which currency is expected to appreciate? At what rate? Explain.
Briefly state and evaluate the problem of time lags in enacting and applying fiscal policy. How might "politics" complicate fiscal policy How might expectations of a near term policy reversal weaken fiscal policy based on changes in tax rates
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