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1. (Aggregate Expenditure) What are the components of aggregate expenditure? In the model developed in this chapter, which components vary with changes in the level of real GDP? What determines the slope of the aggregate expenditure line?
2. Why do you think investment spending is the most sensitive component of AD? Briefly discuss.
3. Why do you think an average American spends more than an average European? Briefly discuss.
4. (Changes in Aggregate Supply) What are supply shocks? Distinguish between beneficial and adverse supply shocks. Do such shocks affect the short-run supply curve, the long-run supply curve, or both? What is the resulting impact on potential GDP?
Comment on the acceptability of the model's ability to pick up the systematic variation in your Fit period actual data and develop a one year forecast
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You perform a travel cost study that looks at the relationship between the cost of visiting a lake (including costs of travel, value of time spent not working & any entry fees),
Which of following is necessarily true regarding total utility (TU) and marginal utility (MU)?Newspaper vending machines are often built so that customers can pay to lift a door and take a paper off a pile of daily newspapers. Newspaper distributor..
Perform a White test for heteroskedasticity using auxiliary regression
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Set up the consumer's utility maximization problem for prices pi, p2 and income m and how can this person be better off than by consuming the bundle
Derive the firm's supply curve, expressing quantity as a function of price. Derive the market supply curve if the company is one of 200 competitors. Compute market supply per week at a market price of $25 per rack delivered and serviced.
Pham can work as many or as few hours as she wants at the college bookstore for $9 per hour. But due to her hectic schedule, she has just 15 hours per week that she can spend working at either the bookstore or at other potential jobs
What are the factors that affect pay differentials? How does each factor increase or decrease relative wages?
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