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Tom and Jacob are college student. each of them will probably get married later and have two or three children. Each knows that if he studies more in college, he'll get a better job and earn more money. Earning more will enable them to spend more on their future families for things such as orthodontia, nice clothes, admission to expensive colleges, and travel. Tom thinks about the potential benefits to his potential children when he decides how much studying to do. Jacob doesn't.
What type of externality arises from studying?
Assume that trade opens between Argentina and New Zealand and that, with trade, a pound of mutton exchanges for a bushel of wheat. Before trade, Argentina produced at point A and New Zealand produced at point C. Argentina moves to point B, while New ..
What is the capitalist, free enterprise ideal? U.S, Japan, European companies are usually the first to design, invent and innovate products. What happens toward the end of these new products international life cycles? What must happen to the economie..
When the money supply increases at the same time that velocity is decreasing, total spending will a. always rise. b. always decline. c. fall if the decrease in velocity is relatively less than the increase in the money supply. d. fall if the decrease..
q.assume that the equation for demand for bread at a small bakery is qd 60 - 10pb 3y where qd is the quantity of
Kaiser Permenente Healthcare is negotiating with two hospital groups for inclusion in its network. Suppose that the “value” or “surplus” created by including one hospital group is $80 million, while the value of including both hospital groups is $120..
Raising tariffs on imported goods in order to reduce our trade deficit with other countries, (i.e. NXUSA
Illustrate and explain how a government budget deficit can lead to a higher real interest rate. Discuss how the effect of a budget deficit on the real interest rate could be altered by an increase in private savings.
Money demand shocks will not affect the output level so long as the Fed pegs interest rates. True or false? Use an IS-LM diagram to explain your answer.
One of the basic facts of financial markets is that financial intermediaries, particularly banks, are the most important source of external funds used to finance business. Explain the reasons from what we learned in Chapter 8 from Money, Banking and ..
Assume that the economy uses Cobb Douglas Production Function of the form: , and A=4, L=10000, K=100. Consumption (C) is given by the equation C = 700 + 0.8(Y – T). What are the equilibrium values of Y, real wages, real rental rate of capital, C, I, ..
An economic model and A good economic model
Current one-year interest rate for USD LIBOR: 5.25%. Caterpillar (CAT), a U.S.-based MNC, has a £12M account payable in one year to a U.K. company for some engines it will purchase from a British company. Show a carefully labeled and titled payoff di..
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