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(1) In many cases, particularly instances of hyperinflation, we do not observe a stable demand for real money balances that is proportional to real output (i.e, MD/p≠LxY). Explain how we alter the simple monetary model to derive the general monetary model.
(2) Some apparently puzzling linkages between money, interest rates, and exchange rates. For example, an increase in the money supply typically leads to a weaker currency but sometimes this is accompanied by higher interest rates and sometimes with lower interest rates. How can we explain this apparent contradiction?
Suppose an economy is in long-run equilibrium. The central bank raises the money supply by 5 percent. Use your diagram to show what happens to output and the price level as the economy moves from the initial to the new short-run equilibrium. What cau..
What is the main difference between a competitive firm and a monopoly firm?
Revnol, a manufacturer of cosmetics, prices its popular pink lipstick at $8. On the basis of test-marketing, Revnol believes that women between the ages of 18 and 20 have an own-price elasticity of −1.5 and that 60 percent of them are likely to purch..
Which of the following is a conclusion of using the generational accounting measure?
You are the manager of a firm that produces output in two plants. The demand for your firm's product is P = 80-Q, where Q = Q1 + Q2. The marginal cost associated with producing in the two plants are MC1 = Q1 and MC2 = 8. How much output should be pro..
Identify the impact of the policy on Demand or Supply of the good(s) or service(s). Discuss the change(s). Draw a supply and demand graph to explain this change. Be sure to label your graph and clearly indicate the change of the curve.
what would volume of output would the two alternative yield the same profit 3-if expected annual demand is 12000 units which alternative would tield the higher profit.
q1. explain the effects of the increase in global demand for cell phones on the market for cell phones and on an
Consider the project balances in Table P5.19 fro a typical investment project with a service life of four years. Determine the interest rate used in computing the project balance. Reconstruct the original cash flows of the project.
There are about 34,000 full service restaurants in Miami-Dade County, Florida with a population of about 2.5 million. What type of market structure is the restaurant business in Miami-Dade County? Are there submarkets with distinct characteristics? E..
Suppose a wage increase from $25 to $27 an hour increases the number of job applicants from 52 to 66. Illustrate what is the price elasticity of labor supply.
Illustrate what conditions would minimize the extent of manufacturing job loss associated with this price increase.
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