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Suppose nominal wages never changed. What would be the significance of such a characteristic?
Suppose the minimum wage were increased sharply. How would this affect the equilibrium price level and output level in the model of aggregate demand and aggregate supply in the short run? In the long run?
Explain the short-run impact of each of the following.
a. A discovery that makes cold fusion a reality, greatly reducing the cost of producing energy
b. An increase in the payroll tax
Suppose the government imposes a price ceiling for rental apartment s at 70% of the current market price. What is a main reason for this type of price control? Is the Pareto efficiency satisfied at the price ceiling? Explain.
Can a government always collect more seigniorage simply by letting the money sup- ply grow faster? Explain your answer.
Assume that the MPC is 0.85 and that the Government is considering to boost the economy to increase real GDP by $2 trillion for the 2008 general elections.
Draw production-possibilities frontiers for countries A and B that reflect these characteristics, and explain why you drew them in the manner you did.
If the loan rate cannot be raised, to what level should the CD rate fall for the loan to be approved? Suppose the bank is willing to accept coverage of 95%. Calculate the RAROC value. Should the bank approve the loan? Suppose all the other assumpt..
Why do you think this case would be transferred into the federal system? Explain. In your own words, define double jeopardy. Do you think this case falls under the double jeopardy clause? Explain your reasoning.
The Great Harvest Bread Company offers their customers quantity (or volume) discounts. Specifically, if a customer consumes 8 or fewer loaves of bread per month, then the price is $4 per loaf. But if a customer consumes more than 8 loaves of bread..
When an inefficient firm or a firm producing a product that people no longer want goes out of business, people are unemployed,but that is part of the normal process of economic growth and development. The unemployment is part of the natural rate and ..
Suppose that, relative to Country B, depreciation, indirect business taxes, and personal income taxes in Country A are high, while welfare and Social Security payments to households in Country A are relatively low. Which country has the higher dis..
Assume that income and business taxes are zero and that the repayment of the principal of the loan does not start before three years. What would be the business (accounting) and economic profit if Norita decided to purchase the bakery shop? Shoul..
Why do economists care whether or not Purchasing Power Parity holds?
When the price of a bond equals the face value? If the quantity of bonds demanded exceeds the quantity of bonds supplied, bond prices. Current U.S. monetary policy is best described as.
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