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Define the multiplier. Explain the economic reasons why the multiplier is greater than one (i.e. why the Eq. GDP increases more than the initial increase in spending (AE)).
If the U.S. interest rate, adjusted for people's expectation of inflation, increases sharply relative to the rest of the world, then
If the Fed pursues expansionary monetary policy
The one year interest rate over the next five years is expected to be 7%, 8%, 9%,10% and 11%. Investors preferences for holding short term bonds have the liquidity premiums for one year to five year bonds as 0%, 0.25%, 0.5%, 0.75%, and 1%, respective..
For a company to convince consumers to use their products repeatedly, they must:
Suppose a firm's demand curve is given by P = 120 - 0.5Q. Find the (value of) price elasticity of demand (point elasticity) for the demand curve when the price is $100. Is demand elastic or inelastic?
How might you construct a measure of the change in the price level. Illustrate what additional information might you need to construct your measure.
How will an increase in the savings rate affect the growth rate of per capita output in an endogenous growth model?
In order to earn some extra money to pay for college, you have decided to open your own tattoo parlor one block from campus. You come up with a business plan and realize that you will need financing to get your business off the ground. You fill out a..
If a nonbinding price floor is imposed on a market, then:
Due to an expanded growth in a city, new waste capacity is needed. A new truck is evaluated to replace the presently owned. The interest rate is 8%.
Joseph can initially produce 10 pizzas or 5 cakes. After some training from a pizza-making expert, his opportunity cost of making. (a) cakes will remain unchanged (b) 1 cake will become less than 2 pizzas (c) 1 cake will become equal to 1 pizza (d) 1..
Whenever the amount of output produced is not as great as the amount that the economy is capable of producing, there is a positive GDP ___________ and cyclical unemployment will be the result.
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