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When the Fed raises the target for the federal funds rate, it:
A. Buys government bonds.
B. Sells government bonds.
C. Increases the required reserve ratio.
D. Lowers the discount rate.
Elucidate the multiplier concept as it applies in this case. What are the qualifications and limitations of the multiplier model.
A monopolist operates in an industry where the demand curve is given by Q=1000-2p. The monopolist's constant marginal cost is 8 dollars. What is the monopolist's profit maximizing price? How much does the monopolist produce? What are its profits?
Assume that there are two identical firms in an industry, each producing the same good at the same constant marginal cost of $60. Make a table, similar to the one we made in class, for the Bertrand, Cournot and Monopoly models, showing the following:..
Explain how do open market operations work through the fractional reserve banking system to impact the money supply and interest rates.
Graphically, the reservation wage is shown by:
In a perfectly competitive industry in which firms have U-shaped average cost curves, the long-run market supply curve is a horizontal line. This market supply curve is not the horizontal sum of individual firms’ long-run supply curves.
Suppose the inverse demand for an industry was given by P = 60 - 0.03Q. What price results from perfect competition in this market? How many units are sold in this market?
A paper mill has leaked a toxic substance (chlorine) into the ground. Fixing the leak was very expensive so the paper mill chose not to fix the leak. Once local residents and local government discovered that the toxic was contaminating local water su..
1. draw a real expenditures curve on a graph showing a recessionary gap. explain what happens to real gdp when it is
If you deposit RM3,000 with each bank, illustrate what will be the difference in the two bank account balances after two years.
What is the Deadweight loss cause by the insurance policy? What happens to the size of teh deadweight loss if it turn out that the marginal external benefit of visiting the doctor is $50?
Suppose a country "X" is facing recession. What fiscal and monetary policy will the central bank and the government use to stabilize the economy!! What tools do the central bank and the government have to impact economy!!
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