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An economy is initially in long-run equilibrium. The introduction of an electronic payments system dramatically reduces the demand for money in the economy.
a. What is the short-run impact on prices and output of the new system?
b. What can the central bank do, if anything, to counteract the short-run changes in output and prices?
c. If the central bank does not take any policy actions, what will be the long-run impact of the electronic payments system on prices and
output?
The "crowding-out effect" suggests that A. excessive population in the cities is pushing people into the suburbs.B. if consumption spending increases investment spending must decrease. C. tax increases are paid primarily out of saving and, therefore,..
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For this week, we are continuing our discussion on GDP and economic growth. We will realize that most of government spending goes towards welfare such as social security. However, it is a common belief that social security benefits
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Calculate the following measures of farm performance and state what they mean (i.e. meaning: return to management for their own and the bank's capital investment):
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The price elasticity of demand for health care is such that an increase in the price of health care will: decrease total health care expenditures. increase total health care expenditures. shift the demand for health care rightward. shift the deman..
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