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Suppose that the substitution effect of an increase in the wage rate exactly offsets the income effect as the hourly wage increases from $12 to $13. What would the supply of labor curve look like over this range of wages? Why?
A open economy has a marginal propensity to import equal to .2 and a marginal propensity to consume equal to .7. Determine propensity to save of this economy?
Suppose, that instead of holding prices fixed as we did in this problem, that prices were perfectly flexible, as in a classical world. Discuss, do not show, how your graphs would be different. Also, comment on what would happen to the government m..
Using the aggregate demand-aggregate supply model, explain how the depreciation of the US dollar in terms of foreign currencies would affect the economy.
Discuss how the economic indicators inflation, employment levels and interest rates,
Explain. A Congressman asserts the following argument: we need to produce more oil here in the United States. We consume 20 about million barrels of oil per day. If we promoted oil drilling in the United States, we could easily increase our domest..
The airline has an average of 40 passengers paying an average of $200 for this flight. Do you think the airline should be flying between the two cities? Evaluate from a short-run and long-run perspective.
In a speech in late 2011, President Obama argued that: "Probably the single greatest cause of the financial crisis and this brutal recession has been the housing bubble that burst four years ago". What did President Obama mean by the "housing bub..
What is the difference between a medium of exchange and a store of value and what is the difference between commodity money and fiat money?
A company in the US develops and patents a technique to produce low cost computer chips: Which account is impacted by this.
Consider the following statement: “Because deficit reduction is costly to the economy, governments should never run budget deficits.”Do you agree with this statement? Briefly explain.
Explain how is the United States doing in the most recent quarter compared to Japan, the Euro Area and Canada in terms of production and employment.
"Sweep" accounts are combination checking/money market accounts which large banks currently offer to their corporate customers. These accounts sweep just enough funds out of the money market portion of the account to prevent checks written on the ..
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