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Suppose that in 2014 there is a sudden, unanticipated burst of inflation. Consider the situations faced by the following individuals. Who gains and who loses? a) A homeowner whose wages will keep pace with inflation in 2014 but whose monthly mortgage payments to a bank will remain fixed. b) An apartment landlord who has guaranteed to his tenants that their monthly rent payments during 2014 will be the same as they were in 2013. c) A banker who made an auto loan that the auto buyer will repay at a low fixed rate of interest during 2014. d) A retired individual who earns a pension with fixed monthly payments from her past employer during 2014.
Elucidate how an increased federal budget deficit resulting from a recession can actually help stabilize an economy.
Which of the following was not a cause of the U.S. budget deficits in the 1980s? Which of the following does not qualify as an automatic stabilizer? Income taxes affect aggregate demand. Which of the following constitutes a direct tax?
Explain what the automatic adjustment mechanism is. Which curve does it cause to move? How does this happen? Will this process happen quickly, or take a long time?
An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000, and the implicit cost is $55,000. All revenues are received, and costs borne, at the end of each year. If the interest ra..
Find the equilibrium values of the real interest rate, consumption, investment, and the price level.
A secondary reason for a government to impose a tariff is to:
The Green City Hospital treated 100 patients in May with 20 nursing hour inputs, and it treated 120 patients in June with 22 nursing hour inputs. What is the total product for each month? What is the marginal product?
A total of 10 players are each choosing a number from (0,1,2,3,4,5,6,7,8). If a player's number equals exactly half of the average of the numbers submitted by the other nine players, then she is paid 100 dollars; otherwise, she is paid 0. Solve for t..
By choosing to right of mid point but to left of republican agenda democrats would get more than half of votes and win What happens if democrats have a fairly socialist party agenda and locate to left of midpoint.
Household finances are similar in some ways to a nation’s international transactions. Suppose a household consumes (spends) more than its income. What are 3 legal ways it can finance this deficit? Give an example of each. How can a nation that runs a..
What is the total market demand for polyglue at the price established by Alchem in Part (a). How much of the total demand do the follower firms supply?
Suppose that real domestic output in an economy is 300 units, the quantity of inputs is 50 and the unit price of the input is $9. The level of productivity and the per-unit cost of production are, respectively:
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