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Discuss the validity and, where appropriate, the invalidity of each of the following statements, using examples to support your claims.
1. A monetary policy that aims to minimize fluctuations in interest rates promotes financial market stability and thus helps to stabilize aggregate economic activity.
2. Money supply can be pro-cyclical even when monetary policy is not. [HINT: Consider how the money multiplier changes with interest rates.]
Call P the unit price of each stamp and find out how many stamps and how many photocopies the firms purchase depending on the value of P.
Bleacher tickets for the game were sold out and many fans would have attended if tickets were available? What is the main rationing mechanism to allocate tickets for the game?
Post and discuss why the tax credit enacted by the 2009 American Recovery and Reinvestment Act has no effect on the employees’ supply of labor using the concepts of consumer surplus, producer surplus and deadweight loss. Apply the effects of the Soci..
You want to set up a college saving plan for your sister. She is currently 10 years and will go to college at age 18. You assume that when she starts college, she will need at least $100,000 in the bank. How much do you need to save each year in orde..
What are some factors (patterns of behavior) that project a company’s culture? List several examples from the organizations you work in.
Comment on the following statement: “When aggregate demand falls below the current output level, an unintended inventory accumulation occurs and the economy is no longer in an equilibrium.”
Monster Conglomerate Inc (MCI) manufactures paper clips for the Pentagon. At its current capital stock it produces paper clips with the production function: y = 8.5L-0.5L2 where L is the number of workers employed. What happens to MC Inc.’s labor dem..
The inverse market demand in a homogeneous product Stackelberg duopoly is. Determine the reaction function for the firm 2 follower. Calculate the equilibrium market price. Calculate the profit each firm earn in equilibrium.
Assume an endogenous growth model with labour augmenting technology.
Suppose instead that the station seeks to maximize its profit from sales of the DVDs. What price should it charge. How many DVDs should it order from which supplier.
(Economic Fluctuations ) Describe the various components of fluctuations in economy activity over time. Because economic activity fluctuates, how is long- term growth possible?
Explain with graph what happens to aggregate demand curve, and/or aggregate supply curve for the following situations: Consumers expect the price of the good to rise in the future.
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