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Suppose that the economy is initially at equilibrium, in which total planned real expenditures equals real GDP. Which of the following will occur if there is an increase in autonomous investment? a. Inventories will increase immediately and production of goods and services will decrease until real GDP catches up with total planned real expenditures. b. Inventories will decrease immediately and production of goods and services will increase until real GDP catches up with total planned real expenditures. c. Both inventories and production of goods and services will increase. d. Inventories will not change and production of goods and services will not change either.
Discuss and explain the differences between short and long run costs and for the short run, discuss what the relationship is in cost theory and production theory and concept of diminishing returns?
Why were the members of OPEC trying to agree to cut production? Why do you suppose OPEC was unable to agree on cutting production? Why did the oil market go into 'turmoil' as a result?
Assume a bank has $200,000 in deposits, a needed reserve ratio of 10%, and bank reserves of $50,000. Then the bank can make new loans in the amount of?
How will the programs affect the debt? How will they affect private investment? Is crowding out a concern in the short versus long run as a result of the proposed policies?
What is the long-run equilibrium price in this market? Explain intuitively, in your own words, why this is the long-run equilibrium. What is the long-run market equilibrium quantity?
A hotel owner, having heard that new hotels consider to open in area, says, We have too many hotels in this town already. Statistics show that vacancy rates average 20% on any given night.
What are the mean earnings of males and females in this sample? Does the regression result support the claim in the news?
Assume the labor force decreases in size due to the large number of people reaching retirement age and subsequently entering retirement. At the same time real interest rates in the economy fall. What will happen in the economy?
If the goal of the transit authority was to maximize total revenues, what is the new price it should set? Also, what would the total revenue raised in this new price scheme?
Michigan is offering financial incentives to improve health. Using economic model(s) demonstrate the impact of such policy on efficiency of the medical care system.
Consider a market characterized by the following inverse demand and supply functions: PX = 10 - 2QX and PX = 2 + 2QX?
Express output per worker (y=Y/L) as a function of capital per worker and the natural rate of unemployment and write an equation that describes the steady state of this economy.
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