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Some people believe that monetary policy should be made by rule rather than by discretion. One belief is
a. setting a policy rule will limit the abuse of power of policy makers.
b. policy makers can better influence the political business cycle in their favor when following a policy rule.
c. a policy rule provides policymakers with the greatest flexibility to manage inflation.
d. if the fed was required to follow a low inflation policy, the economy would face a less favorable short run trade off between inflation and unemployment
China will almost certainly overtake the US in terms of GDP within a decade or so. What does that tell you about the standard of living of Chinese people compared to those in the US?
argue the relationship among the marginal cost also the average variable cost also among marginal cost also average cost.
Consider the basic Rothschild - Stiglitz model with asymmetric information and two types on consumers. A policymaker who has taken this class suggests that is might be beneficial to impose a flat tax on healthy people and distribute the tax revenue t..
Construct a numerical example to show that the exclusion of municipal bond interest from income taxation is equivalent to a government subsidy of state and local capital spending. Assume you believe that income is a good proxy for ability to pay. Wha..
You are the manager of a monopoly that sells a product to two groups of consumers in different parts of the country. Group 1’s elasticity of demand is -2, while group 2’s is -4. Your marginal cost of producing the product is $40. Determine your optim..
To assess a firm's demand for capital we must determine the present value of marginal revenue products and marginal factor costs of capital. A firm maximizes profit in the hiring of capital when the MRP of capital is greater than the MFC of capital. ..
Given this risk, how should the column player act. Anticipating the column player's thinking, how should the row player act.
If the investment described in Exercise 12 is an individual’s possible weekly compensation and the individual has no control over the outcome, what effort will a risk-averse individual put in? What about a risk-seeking individual?
What are the potential consequences of a country having a large overall debt? If you were in the position to implement a solution for the country’s long-term debt, what would it be and why?
A survey of 200 college graduates who have been working for at least 3 years found that 90 owned only mutual funds, 20 owned only stocks, and 70 owned both. What is the probability that an individual owns stock? A mutual fund? What is the probability..
Management predicts that if the strike is successful the cost of worker will increase to $100 per day.
Using the data provided above, determine if the Hernandez Corp. is using a cost minimizing combination of inputs. Explain your answer/show your work. If your answer is no, how should the input combination be adjusted?
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