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Long-Run Adjustment
The ability for the economy to eliminate any imbalances between actual and potential output is sometimes called self-correction. Using an aggregate supply and aggregate demand diagram, show why this self-correcting process involves only temporary periods of inflation or deflation.
Illustrate in the graph below the deadweight loss (DWL) that would result if this monopolist were allowed to operate as a profit maximizing firm without regulation.
Explain how does the state of the economy affect federal budget. Explain how can macroeconomic variables inter-relate to each other.
Discuss the evolution and responsibilities of the Federal Reserve System. What circumstances promulgated both the development and composition of the system.
On the other hand, you might also analyze in detail the effects of higher unemployment among a business cycle downturn.
Explain how will the quantity of aggregate output supplied respond to the fall in prices. What will happen when firms and workers renegotiate their wages.
Assuming individuals hold no cash (all cash is in bank vaults as reserves), calculate the simple money supply from the following reserves requirements and deposits in the systems. 5 Points each, 30 points subtotal
Construct a table shoeing Grey's marginal sales per day in each state. Calculate Grey's maximum monthly commission income.
Is the price elasticity of demand elastic or inelastic for that good or service. Explain how should the company alter the price of the good or service to increase revenues.
Problem based on Utility Function - Problem, Answer and explain the following using a diagram which is completely labeled.
Economic forecasters predicted that consumption also GDP would increase because of higher refunds on income taxes.
Short term Treasury bills [3 and 6 month] have current annual rates of interest around 0.5%. Use that info plus your best forecast of inflation to calculate the real rate of interest on those bills.
Political business cycle: Do economic events affect presidential elections? To test this so-called political business cycle theory, Gary Smith 20 obtained the following regression results based on the U.S Presidential elections for the four yearl..
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