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"Since November 2011, the Reserve Bank has lowered the cash rate on eight separate occasions from 4.75% to 2.5%. Clearly, the Bank has become far less concerned about inflation and is giving a much greater emphasis to unemployment in its policy reaction function" (South Western Tasmania Weekly News 3 September, 2013) In the light of the quotation, assume that the economy is in long run equilibrium when the Reserve Bank of Australia decided to raise its inflation target and give greater emphasis to unemployment in its policy reaction function. Use the aggregate demand - aggregate supply curve framework and the Reserve Bank's policy reaction function to explain this process and consider the likely consequences for the macro economy in both the short-run and the long run. That is, explain the effect of this change in policy by the Bank on real GDP, unemployment and the rate of inflation in both the short - run and the long - run. What will be the effect of this change in policy on both the real and the nominal interest rate in the long - run?
Assume capital depreciates at 10 percent a year. Economy A has 1.000 units of capital while Economy B has 2,000 units of capital. Illustrate what must Gross Investments be in Each Economy to keep capital stocks Constant.
A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five acres of land Elucidate how.
"Suppose the market for oranges is disturbed by below-freezing cold weather that destroys much of the orange crop in the California. Predict what will happen to the equilibrium price and quantity in the market for oranges because of this natural d..
Compare the effects of an aggregate-demand-induced recession with an aggregate-supply-induced recession.
Intially Starbucks expanded internationally by licensing its format to foreign operators. Why it soon be came disenchanted with strategy.
Illustrate which competitor is better positioned to take advantage of this opportunity. Assuming that neither company can segment the market.
Write down the decision box which combines the letter grade also the amount of fun you have into a single payoff for each outcome.
What are some examples of behavior that at one time wire victimless crimes that are no longer criminal.
Movies are distributed in a variety of forms, not just first run theatrical presentations. What other ways are movies distributed. What are the different price points.
By what percentage would GDP be boosted if the value of the services of stay-at-home spouses were included in GDP
The cost curves of the firm. In terms of economies of scale, why would a firm sometimes want to expand output and sometimes not want to expand output.
Within two weeks sales had fallen. Utilizing your knowledge of game theory, Illustrate what do you think disrupted McDonald's plans.
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