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Read the article "The effects of minimum wages on employment" and answer the questions below:
a) Through which channels does a binding minimum wage affect employment? Illustrate this effect with a diagram.
b) According to recent research what are the employment effects of minimum wages?
The fuel prices are goingdown internationally. But the benefit is not being shared by the consumers.Why?
Suppose that the government increases taxes and government purchases by equal amounts. What happens to the interest rate and investment in response to this balanced-budget change Does your answer depend on the marginal propensity to consume
What would it not be better to nationalize public utilities as some European countries have done. Explain.
Suppose that any money lent by a bank is always deposited in a checkable deposit and that the reserve ratio is 10%. The Fed purchases $100 million in Treasury bills.
In economic theory, a moral hazard is a situation where a party will have a tendency to take risks because the costs that could result will not be felt by the party taking the risk.
Assume that, over time, engineers develop new residential furnaces that can run on different tpes of fuels, e.g., natural gas, electricity, propane, and fuel oil, simply by flipping a switch on the furnace.
For few months, prior to your vacation trip to France, you find that the exchange rate for your U.S. dollar has increased relative to the Euro. If you were a U.S. citizen or resident, are you pleased.
Is the value of a house built in 2000 and resold in 2011 included in 2011 GDP? Why or why not? Would the commissions for the real estate agent who helped buy (and sell) the house in 2011 be counted in 2011 GDP? Why or why not?
Which of the following is the best example of a monopolistic competitor? Firms in a monopolistically competitive industry produce:
Compute the level of money supply necessary to attain these values of P and Y. If the money multiplier is 10, how large an open market purchase or sale must the Fed conduct?
The invisible hand theory which essentially says, people through pursuing their own economic self interest, help allocate resources in the economy as if an invisible hand is at work to do so.
Estimate whether each of following, other things held steady, would lead to an rise, a reduce, or no change in long run aggregate supply, and Describe difference between the government purchases multiplier and the net tax multiplier.
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